The crypto contagion sparked by Terra’s infamous implosion this year only spread to companies and protocols with “poor balance sheet management” and not the underlying blockchain technology, says Kraken Australia’s managing director Jonathon Miller.

Speaking with Cointelegraph, the Australian crypto exchange head argued that sectors such as Ethereum-based decentralized finance (DeFi) revealed its fundamental strength this year by weathering severe market conditions:

“Platforms like Ethereum did not fail when the volatility hit. You saw decentralized markets, decentralized lending models, DeFi in general, not fall over. There was no contagion there. What you saw was poor balance sheet management from closed shop trade fee lenders,” he added.

Miller's comment comes despite CoinGecko reporting a 74.6% market cap decline in DeFi during Q2 2022 following the collapse of Terra and a rise in DeFi exploits. Though the crypto data aggregator also noted that the industry managed to retain most of its daily active users.

Miller also added that blockchain projects only ran into issues when the design of their underlying protocols was “obviously poor”, such as the case of Terra’s algorithmic stablecoin TerraClassic USD (USTC).

“I think that's a trade off. There's a Treasury management problem, not a blockchain problem,” he said.

Questioned about how Kraken fared through the crypto bear market this year, Miller suggested the company was well primed to deal with the volatility. He noted that the company has survived many downturns in its 11-year history, and notably didn’t blow a lot of money on marketing during the bull run last year.

“We're in a slightly different position as perhaps some of the other exchanges that have been out