At the EthCC 2025 conference, Ethereum co-founder Vitalik Buterin delivered a sobering yet visionary address. He urged the crypto space to pause and reflect on what it’s building—and why.
Buterin emphasized that decentralization isn’t just a branding slogan—it’s a foundational value that empowers users with freedom.
Crypto Industry is at an Inflection Point: Vitalik Buterin
Vitalik Buterin believes that the crypto industry is at an inflection point.
“Growing the crypto space is not a clear good. The clear goal is to build the right kind of thing. We need a philosophical shift,” Buterin stated.
Vitalik Buterin at EthCC. Source: BeInCrypto
He highlighted several pressing concerns in the ecosystem: Layer 2s with instant upgrade “backdoors,” decentralized exchanges with questionable mechanics, and dApp frontends that are vulnerable to server-side compromises. As a practical solution, he advocated for immutable frontend hosting via static HTML on IPFS.
Buterin also warned against superficial fixes in privacy and governance. From governance models that auction off votes to identity systems where zero-knowledge proofs fail to protect users under coercion, he argued for a more holistic and rigorous approach.
“Think of privacy as a feature to add, instead of thinking it as a bug to reduce,” he said.
A key litmus test, he noted, is resilience: “If a company disappears, do your users still have their assets?”
Buterin also reflected on broader trends in tech, drawing a comparison to Android. While Android brought Linux to the masses, he questioned whether it truly empowered users.
“The default Android phone has a bunch of spyware… It’s an ecosystem that is very mixed,” he noted.
However, he said that crypto should not follow that same path—something that just goes up in value and then fades.
Buterin stressed that open source, censorship resistance, and user freedom should not be optional.
“We don’t need to be like OpenAI,” Buterin remarked.
The BeInCrypto team is present at the EthCC event and witnessed firsthand Buterin’s call for crypto builders to return to first principles—freedom, resilience, and meaningful decentralization.
Since reaching an all-time high of $0.19 on July 23, SPK has seen its price plunge by 50% amid intense profit-taking activity.
The sharp downturn comes as bullish sentiment around the token continues to weaken, raising the possibility of further losses in the near term.
SPK Whales Retreat, Bears Take Over
On-chain data from Nansen reveals that large holders—wallets valued over $1 million—have steadily reduced their SPK exposure. Since July 23, token balances across these whale wallets have fallen by 27%, highlighting the retreat by major stakeholders.
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The impact could be even more pronounced if short-term holders—many of whom are typically quick to exit at the first sign of weakness—begin to follow suit.
With bullish conviction already eroding, a fresh wave of distribution from “paper-handed” investors could worsen the sell-off, pushing SPK deeper into correction territory.
Further confirming the downtrend, SPK’s Elder-Ray Index shows a consistent weakening in bullish momentum. Since the onset of the price decline, the indicator has printed green bars—typically a sign of buyer strength.
However, their sizes have progressively shrunk with each trading session. This contraction signals a steady drop in SPK’s buying pressure, which confirms the market retreat.
Additionally, bearish sentiment is reflected in the token’s futures market by its long/short ratio. At press time, the ratio stands at 0.91, indicating a growing preference for short positions over longs.
The long/short metric measures the proportion of bullish (long) positions to bearish (short) positions in an asset’s futures market. When the ratio is above one, there are more long positions than short ones. This suggests bullish sentiment, with most traders expecting the asset’s value to rise.
On the other hand, a long/short ratio below 1 means that more traders are betting on the asset’s price to decline than those expecting it to rise.
In SPK’s case, the current ratio of 0.91 suggests that traders are increasingly positioning for further downside, confirming the pessimistic outlook seen in spot market sell-offs.
SPK Bears Tighten Grip as Volume Falls
At press time, SPK trades at $0.085, shedding 7% of its value over the past 24 hours. Amid the broader dip in activity across the crypto market, the altcoin’s trading volume has plunged by over 30% during that period.
When an asset’s price and trading volume fall, it signals weakening market interest and fading momentum. This combination suggests a lack of buyer confidence in SPK and hints at potential for further downside.
The recent depeg incident involving sUSD from Synthetix has highlighted that this sector remains fraught with risks despite the immense potential of algorithmic stablecoins.
The sUSD incident is not the first to expose the vulnerabilities of algorithmic stablecoins. From technical challenges and regulatory pressures to dwindling community trust, projects in this space must navigate numerous obstacles to survive and thrive.
The Landscape of the Algorithmic Stablecoin Market
Algorithmic stablecoins, which maintain their value without direct asset backing, were once hailed as a breakthrough in decentralized finance (DeFi). However, according to CoinMarketCap data from April 2025, the total stablecoin market capitalization stands at $234 billion, while algorithmic stablecoins account for about $458 million, equivalent to just 0.2%.
This stark disparity reflects the reality that algorithmic stablecoins have yet to gain widespread trust from the community. High-profile failures like the collapse of UST/LUNA in 2022, coupled with regulatory uncertainties such as the EU’s MiCA framework, have fueled skepticism.
More recently, the depeg of Synthetix’s sUSD is a typical example of this model’s inherent risks.
A Deep Dive into Synthetix’s sUSD Depeg
Synthetix is a well-known DeFi protocol celebrated for its synthetic asset system. Within this ecosystem, sUSD is an algorithmic stablecoin designed to peg its value at 1 USD, backed by the SNX token and price data from Chainlink.
However, sUSD has faced significant challenges with a prolonged depeg recently. At the time of BeInCrypto’s report, sUSD was trading at 0.77 USD, which has persisted since late March 2025. The primary cause was a major liquidity provider withdrawing from the sBTC/wBTC pool on Curve, which triggered intense selling pressure on sUSD. This forced users to convert other synthetic assets like sETH or sBTC into sUSD, exacerbating the price decline.
On April 21, 2025, Kain Warwick, the founder of Synthetix, announced on X that the team had implemented an sUSD staking mechanism to address the issue. However, he noted that the mechanism remains manual and lacks a fully functional user interface (UI), which is expected to launch in a few days.
“Update on the sUSD depeg. We have implemented an sUSD staking mechanism but it’s very manual until the UI goes live in a few days. Here was my hot take from discord though,” shared Kain Warwick, founder of Synthetix.
Warwick further stated that if the incentive mechanism (carrot) proves ineffective, Synthetix would adopt stricter measures (stick) to compel stakers in the 420 pool to participate more actively. He emphasized that, with the collective net worth of SNX stakers reaching billions of USD, Synthetix has the financial resources to stabilize sUSD and resume development of derivative products on Layer 1.
No Successfully Algorithmic Stablecoin Project
Before the sUSD depeg incident, the market witnessed the dramatic collapse of UST/LUNA in 2022. UST, Terra’s algorithmic stablecoin, suffered a severe depeg, dragging LUNA’s value down from $120 to near zero. This event caused billions of USD in losses and significantly eroded trust in the algorithmic stablecoin model.
More recently, the ‘Godfather of DeFi’, Andre Cronje, behind Sonic (formerly Fantom), also shifted direction. Sonic initially developed a USD-based algorithmic stablecoin but later pivoted to a stablecoin pegged to the UAE dirham.
“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement,” Cronje stated.
Beyond technical risks, algorithmic stablecoins face mounting regulatory pressures. The EU’s MiCA regulation, effective since June 2024, imposes strict standards on stablecoin issuers to ensure consumer protection and financial stability. Under MiCA, algorithmic stablecoins are classified as ART (Asset-Referenced Token) or EMT (E-Money Token), requiring projects to meet complex compliance demands.
This intensifies the pressure on developers, especially as other jurisdictions also tighten crypto regulations.
These examples show the vulnerability of algorithmic stablecoins to liquidity shocks and market sentiment, particularly due to their lack of direct asset backing.
The Potential of Algorithmic Stablecoins
Despite the challenges, algorithmic stablecoins still hold developmental potential. A March 2025 post on X by CampbellJAustin suggested that a next-generation decentralized algorithmic stablecoin is feasible if lessons are learned from past failures.
“I actually think a next-gen decentralized algorithmic stablecoin is possible. I also think it will not be done correctly by the crypto community because the primary constraints are economic and risk management, not technological,” CampbellJAustin shared.
However, projects must focus on building more price stability mechanisms, combining algorithms with liquidity safeguards to succeed. Additionally, they should prepare for regulatory requirements, particularly in regions with stringent rules like the EU. Transparency in operations, regular audits, and clear communication with users are crucial to rebuilding community trust.
By addressing these factors, projects in this space can seize the opportunity to regain confidence and drive innovation.
