Vitalik Buterin has issued a warning regarding the potential dangers of overleveraged Ethereum (ETH) treasury products. He highlighted that a significant drop in ETH prices, ranging from 30% to 90%, could trigger cascading liquidations if leverage levels are not kept in check. Buterin emphasized that the risks associated with ETH treasuries become prominent only when leverage surpasses safe thresholds.
He advocated for the implementation of clear rules and the involvement of responsible actors to ensure the safety of ETH treasuries, contrasting this with past failures in the crypto space. Buterin also noted that any prolonged crisis over the next three years would likely be due to excessive leverage rather than the treasury model itself.
Vitalik Buterin Warns of Risks in Overleveraged ETH Treasuries
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