> This is availability heuristic. Many financial innovations work out well and power everything we do today without a second thought. Credit cards, internet banking, mobile banking, etc etc etc. Should we ban all financial innovations because a subset can cause collapse?
All of these tools are strictly regulated specifically to avoid that collapse. Because we learned from when they collapsed before not to let them run wild and do whatever they wanted because it's a bad time.
> For stablecoins, the difference here is that all data is open.
Only some fraction of the data is open. You have no access to exchange books. You can see where things are on chain, but the backing is completely opaque. Have you seen Tether's audits? I haven't. I know they wired all the cash to back one attestation over from Bitfinex the morning of the attestation and wired it back. Hat tip to the New York Attorney General. And they're far and away the largest.
Trustlessness can by definition only extend to what can be wholly represented on chain. Stablecoins cannot.
> For ICOs, this exists today as well in our regular regulated markets as well. Don't tell me you think AMC or GME is worth what they are worth.
They're not good investments because they're overpriced, but they're not zero-sum. They have customers and the intrinsic value of the shares increases (ideally) through dividends, buybacks and capital reinvestment over time. This means returns aren't exclusively generated by other shareholders but instead through a third party (customers).
Not every equity will win, and you can of course lose money buying them, but equities are positive sum.
Don't conflate a stock being "worth what they're selling for" with them being a zero-sum game like token offerings.