In theory most of the exchanges that competed with FTX could fail in the days ahead. Over-tokenization and rewards (fee discounts etc if you topped up using their in-house token) will be seen as a Hindenburg level miscalculation in the crypto-economy; the in-house token is a fragile Achilles heel.

And maybe these exchanges deserve to fail...

it's a greedy, rather than elegant or necessary, design.

These exchanges getting rich off their in-house tokens. Missed that part in Satoshi's white paper lol.

Like any investment, if they get significant lock-up, the price can rise.

But like any investment, when the users flee, the price can fall.

Tying an exchange's foundational and operational health to the daily fluctuations of a layer2 token will prove to be insanity.

With Fidelity and BlackRock in the space, and others likely joining soon, these exchanges also can't compete on fees. Fidelity is planning to offer "commission free" Bitcoin and Ether trades. Even if they were healthy and honest, FTX's business model would not fare well with a multi-trillion dollar giant like Fidelity (with real branches, etc.) moving into the sector, and going commission free.

The wealth as I always understand it is in the blockchains, buying up block space makes sense to me, building exchanges around layer2 shitcoins does not.

Much change lays ahead. Exchanges should be nimble operators, not the Smaug shittoken hoards we find today. If those shittokens drop unexpectedly in value, the house of cards comes crashing down, just as it did with FTT (the FTX token).