The invisible cost: how the open source approach from Elgius led to the financial strains of MTGOX
In a recent post forum, enthusiasts of the MTGOEX online trading platform (formerly known as Larvecoin Exchange) discussed the unexpected consequences of its open source ethics. A particular thread has highlighted the indirect cost initiated by MTGOX, which accepted a transaction without an angle. In this article, we will immerse ourselves in history behind Elgius, a project that has quietly made waves within the cryptocurrency community.
The birth of the Open Source
Elgius, abbreviation of “Ethereum-Like Governance”, is an open source platform designed to provide a decentralized alternative to traditional exchanges like MTGOEX. Its main concept revolves around Ethereum blockchain, allowing users to create and manage their own decentralized applications (DAPP). The initial objective of the project was to establish a more transparent and community exchange model.
The promise of standardization
One of the main characteristics of Elgius is its ability to accept standard transactions without an angle. This means that any user can launch a transaction on the platform, whatever the balance of their account or the favorite currency. This promise of standardization was initially presented as a major sales argument for Elgius, and it has attracted many users wishing to participate in a more open and inclusive exchange.
The indirect cost: the Bitcoin exhibitions of MtGox
However, behind the scenes, MTGOUX faced significant financial strains due to the volume of transactions facilitated by Elgius. As the popularity of Elgius increased, his exposure to Mtgox did. The platform began to accumulate a large amount of bitcoins from these standard transactions, without correctly taking into account the underlying risks.
When users initiate transactions using Elgius, their account sales were used to buy other assets, such as Bitcoin, which were then listed on MTGOEX. This created a situation where Mtgox “bought” his own cryptocurrency, leading to a significant increase in liquidity and value. Unfortunately, this also meant that the bitcoin reserves of the platform remained stagnant, exacerbating the problem.
A hidden cost
The indirect cost initiated by Elgius’ open source approach on MTGOEX has become evident when the two platforms were faced with an unexpected liquidity crisis. While users continued to initiate standard transactions, MTGOEX found himself faced with a massive increase in Bitcoin exhibitions. This led to a situation where the bitcoin reserves of the platform were no longer sufficient to cover its responsibilities.
The result was a financial tension that threatened the very existence of MTGOUX. It was only when the developers of Elgius recognized the problem and made the necessary adjustments that the platform began to recover. However, all users who had invested their bitcoins on Elgius do not share this good fortune.
Conclusion
In conclusion, the story behind the financial strains of Elgius and MTGOX serves as a tale on the unforeseen consequences of open source approaches in the development of cryptocurrencies. By prioritizing normalization without correctly taking into account the underlying risks, MtGox inadvertently created a situation where it “bought” its own assets at unsustainable levels.
The incident highlights the importance of carrying out in -depth risk assessments and maintaining robust security measures to mitigate the potential problems that may arise when decentralized systems like Elgius are brought to traditional exchanges. It also underlines the need for greater transparency in the development of cryptocurrencies, in particular when it comes to responding to concerns concerning liquidity and management of assets.
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