As the cryptocurrency market continues to grow with technological advancements, internal conflicts in projects are increasingly having a significant impact on their value. Many cases have been reported where internal disputes led to projects stagnating, which ultimately led to a dramatic decline in value.

A recent case: the collapse of the OpenGPT project

A notable recent example is the collapse of the “OpenGPT” cryptocurrency project, which included GPT functionality. The highly anticipated project has seen its market value plummet due to ongoing internal conflicts between CEO Peter van der Veen and CTO Sudhakar Patel. This conflict ended with Patel’s resignation, raising concerns about the potential collapse of the project.

For several months, van der Veen, an experienced marketer from the Netherlands, and Patel, a technologist from India, had been at odds. The main issue was to balance the speed of development with security. Van der Veen emphasized long-term reliability and stability, advocating stringent safety protocols, while Patel prioritized rapid innovation, often downplaying safety concerns.

The conflict came to a head when another GPT project, “SmartGPT”, on which Patel served as an auditor, suffered a major hacking incident. This event caused the value of the SmartGPT token to drop significantly, prompting van der Veen to demand stronger security measures for OpenGPT. However, this demand led to further dissatisfaction with Patel, which ultimately led to his resignation.

Patel’s departure halted technical development of OpenGPT, sparking widespread concern among the community and investors. Following this news, the value of OpenGPT tokens fell by over 90%, wiping out a multi-million dollar market capitalization. Investors, fearing the impact of Patel’s absence on the development of OpenGPT, rushed to sell their shares.

Now van der Veen faces the difficult task of finding Patel’s successor and restoring investor confidence. However, industry insiders remain skeptical. “The success of OpenGPT depended largely on the expertise of Sudhakar Patel. Without it and with security issues at the forefront, the project faces serious obstacles,” noted Meltem Demirors, Chief Strategy Officer at CoinShares.

Despite these challenges, van der Veen sought to reassure the community, stating: “While these are undoubtedly difficult times, our mission to build safe AI and ensure its benefits are widely and equitably distributed remains unchanged. To continue our mission, we are actively seeking top-notch talent.” However, the road ahead seems steep.

Learning from other cases: NEM, Tezos, IOTA

The case of OpenGPT is not unique. There have been several other cases where internal conflicts have devastated cryptocurrency projects.

NEM (XEM): In 2019, leadership disputes within the NEM Foundation became public, which significantly delayed the implementation of the project. As a result, the price of XEM plummeted, leading to a loss of investor confidence.

Tezos (XTZ): Tezos, which raised significant funds during its ICO in 2017, also experienced delays due to conflicts among its founders. The resignation of the CTO caused a sharp decline in the value of XTZ, which remained at a low level for a longer period.

IOTA (MIOTA): IOTA has faced disruptions in its progress due to disagreements over the project’s vision and internal conflicts in its foundation. This led to a significant drop in MIOTA’s price from its peak.

Why internal conflicts lead to the decline of values

These examples share a common theme: internal conflicts and leadership disputes hinder technological progress, causing investor anxiety and leading to the withdrawal of capital. In cryptocurrency projects, transparency and trust are crucial; if they are lost, the market reacts quickly. In particular, the resignation of key technical leaders raises serious doubts about the future feasibility of the project.

The risk of internal conflict and the importance of avoiding it

The collapse of OpenGPT, as well as the earlier examples of NEM, Tezos and IOTA, show that internal conflicts in cryptocurrency projects can have a direct and devastating impact on their survival and market value.

First, internal conflicts disrupt technical development. When central technologists or leaders leave, progress slows and, in the worst case, the project may come to a complete halt. In the case of OpenGPT, Patel’s resignation effectively stalled technical development, causing the token’s value to plummet. The lack of technical leadership seriously undermines the credibility of the project.

Next, the impact on investor confidence cannot be overlooked. In the cryptocurrency market, investor confidence is directly linked to value. When internal disagreements or conflicts come to light, investors often lose faith in the project’s future and withdraw their capital. In the case of OpenGPT, security disputes raised investor concerns, leading to a significant decline in market value.

Finally, there is a risk of maintaining a competitive position. When internal conflicts cause a project to stall, there is a risk of falling behind the competition and losing market position. Ethereum Classic and Bitcoin Cash, for example, have struggled to stay competitive with their main networks.

To avoid these risks, consistent leadership and clear communication are key. Additionally, maintaining a balance between technical development and security is essential to ensure the stability of the project and maintain trust in the market. Investors also need to pay close attention to the internal dynamics and leadership of projects to assess potential risk.