Ask Leo: What Have You Personally Learned From Terra LUNA/UST Collapse?
In another #askleo post from today, @jk6276 has asked us if we'll use the new Terra fork if it happens.
Most, if not all responses so far were in the "out of the question" area, including mine. Understandably. Fool me once, shame on you; fool me twice, shame on me.
I'd like to extend this topic with another question, and possibly a little introspection we could use in the aftermath.
The question is What Have You Personally Learned From Terra LUNA/UST Collapse?
Personally, I've learned a few things and was reminded of others in a brutal way.
Let's see:
- market cap is a bad indicator regarding the solidity of a crypto project: ranking crypto projects by market cap is a joke - that's how Terra's UST was a top 10 coin and HIVE is #141 (won't even check for HBD); UST is still ranked higher than HIVE, with Terra chain halted for days
- having no alternative stablecoin in an ecosystem, doesn't automatically make the existing option a good one - that's what happened to me in the Cosmos ecosystem (on Osmosis)
- investment without research equals gambling (which may be ok from time to time but treat it as such)
- not having enough time for proper research is a bad excuse, which means you shouldn't invest (big amounts) because your focus is elsewhere
- invest primarily where your focus is
I wasn't impacted as much as others I know by the Terra LUNA/UST collapse, but still, it's over $1500, maybe even $2000 if I won't recover any OSMO from the UST/OSMO pool (because LUNA/OSMO is already 100% loss). But could have been over $4000 half a year ago, when I built it up to upgrade my card tier at crypto.com.
At the same time, knowing that most of my funds in the Cosmos ecosystem come from LP and staking rewards and airdrops, one could be tempted to say: easy come, easy go! But why go? :)
As I said in another post, this amount won't make nor break me, but it leaves a sour taste in my mouth thinking I put my trust in Terra's stablecoin without properly researching it.
So, What Have You Personally Learned From Terra LUNA/UST Collapse?
That's something to reflect on even if you were not affected directly.
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This ones describes my situation perfectly. $2,500 loss here.
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Sorry about your loss.... these things happen. I don't think it's due to that anyway. Even with alot of knowledge, people still fell.
Its a case of trust. Luna had alot of people trusting them
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Trust makes us do stupid things with our money sometimes. Even when I started to learn some worrisome things about UST, I didn't move some of those funds elsewhere (like in HBD), for several reasons:
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Yeah, I know Adrian. We need to be careful what and when we pick some of our investments in the future. We are still here! Every mistake we learn from is a step forward.
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I know the feeling too. I bought it last week at over $2. First time I buy this coin, seeing it dropped from nearly $100 I thought it was a buy opportunity. It was a small amount, but I shouldn't have touched it at all !
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When a coin crashes harder than the market we need to understand why before touching it.
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what i learnt is we must always take profit from our investment
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Yep. Great lesson everyone should apply.
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Diversification, diversification, diversification.
No matter how much you believe in a project.
And don't over leverage or invest what you cannot afford to lose.
The risk is in what you don't know!
Yup... diversify is always a good thing. You never can tell how it might play out.
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This is a good point!
I don't use leverages (or very, very rarely do), and of course, another good point!
I agree, to a degree. Of course, putting all your funds into one project is a mistake. Even if it's your own. But many of us in the crypto space suffer from over-diversification. We have invested in multiple protocols, tens of platforms, and hundreds of products/tokens. Sometimes tiny amounts, but they add up. And you certainly can't focus on more than a few things, so the rest go more or less on auto-pilot and you won't know there's something wrong with them until it's too late.
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Terra was on red alert 2 months ago, but nobody cared to listen to, all thought it another FUD.
Whatever you do this crypto market never remains stable, all coins are vulnerable to crash.
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Something that doesn't bend, breaks. This is why I like HBD isn't made to keep peg 100%.
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First not to put all eggs into one basket and diversify, even if it comes to stablecoins. Second understanding the tokenomics and risks associated is a must. At least when you fall you have assumed this loss as an eventual event.
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Yep, true.
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I would have to say diversify and do your research. I wasn't part of the collapse but I saw a lot of people affected here on Hive. I am glad that HBD came out with 20% APR and I lost all interest in Terra/LUNA.
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Wow! Another HBD testimony:)
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I should have done the same. But it was too damn inconvenient to move the funds out of Cosmos to Hive and the LP rewards were higher than 20%. Something like 60-80% (including staking rewards for OSMO in LP). But only half "stablecoin". The other part was OSMO. As it turns out, OSMO held, and UST didn't.
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Yea but the 14 day lock-up period really did hurt anyone investing in a half stable coin pool. At least the IL didn't turn out that bad and I heard they let people get out their funds even if it was a bit late.
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most important lesson: if it sounds like bitconnect, smells like bitconnect then it will eventually crash and burn like bitconnect :P
I covered my ears with my hands, held my breath, and closed my eyes...
that's how it feels like most of the time dealing with crypto :)
There's nothing bad in putting your eggs in one basket but research well because at the end of the day it all goes back your failure in doing research
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Maybe putting all your eggs in one basket is a bit drastic, as you assume risks that can't be researched, and, if you are small and without much influence on how things are going in the place where you invested the risk grows.
But I agree we in crypto suffer more from over-diversification rather than focused investments. Not doing proper research is a big issue, and I'm guilty of that with UST.
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Even with enough research, you’re at a higher risk in putting all eggs in one basket. You can’t just predict it enough.
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No risk no reward, the higher the risk the higher the reward
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I learnt that all that glitters isn't gold and any over leveraged asset is sus and could get you rekt
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Very well said! :)
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I did not have anything invested, but it does hit close to home with all of the other crypto assets I own.
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Yes, even on Hive we need to check projects out, especially if you invest in them. It's not once when we had 'unexpected' surprises.
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Stay away from projects that Do Kwon touches or talks about.
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Unfortunately, I didn't bother to check the guy before. If I had done so, I would have run away from Terra as far as possible.
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It's crucial to do some research to make safer investments.
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I remember before the collapse, more and more people are trying very hard to justify how great luna/UST is just because they made great money. Some even say that UST is the most stable coin it is going to be. So always trust yourself and do your own research.
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Yes, there was a lot of hype. But how many pitfalls were hidden behind that!
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Apart from the obvious ones that everyone has mentioned, This is a reminder to be very careful of projects run by brash, egocentric founders. The bigger the ego, the more caution is needed.
Also, if you see lots of criticism of a project across twitter, pay closer attention. I was seeing all sorts of warning signs for months, but didn't pay attention. My bad.
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I regret two things the most. I didn't check out Do Kwon. If I had done so, I would have exited UST and LUNA immediately.
The other thing which I regret is that I also started to see and read the signs about UST, but chose to ignore them. My biggest deterrent was the 14 days unbonding period. If I could have accessed them immediately I think once or twice I was prepared to move at least partially to other places.
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I learned not to get carried away by euphoria or not to risk something that could go down. To investigate very well the developments of the project and its solidity.
Although I bought with $20 almost half a million of LUNA, I know that if it becomes worth even $0.01 I will recover absolutely everything and with a lot of profits. but it is a project that only remains to see to believe.
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Yeah... Well, when you make easy money you tend to cut corners.
If I remember right, I think I invested about 500$ in Cosmos as a whole (actually most of it came from crypto.com where I bought some CRO initially). I still have much more than 500$ worth of assets in Cosmos, after I withdrew from there thousands already to other places when the market was at its peak.
I don't like that I lost on Terra, but overall I'm well into profit on Cosmos and CAN'T go into a loss unless I invest more and lose (which I don't plan to).
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Of course, if I look at the positive side, it's that I also make a good profit.
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Most probably I learned nothing and when there'll be a next time, I'll be involved as well. I didn't have all my eggs in the same basket, but the Luna eggs are all worthless and if a market crash wasn't enough this Terra crash tops it all... better get more eggs into the Hive basket now :) (btw, salutari din Bucovina)
Hahaha! We do tend to repeat our mistakes, don't we?
Salutari! Pacat ca n-am fost niciodata in Bucovina...
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Chiar pacat, ca si zona e foarte buna de clatit ochii, si iarna si vara, super peisaje.
What have I learned?
I'm even more thankful that my blinders are on and all I seem to pay attention to in crypto...Is what happens on Hive LOL
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Yeah man, it worked out great for you this strategy. And I love it: you focus, something I want to do more of, even though I do want to wander around outside Hive too.
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Honestly, never heard of the name not until the crash. Suddenly, it became the talk of cyberspace.
At least now I realized why other analysts say that market cap is not a reliable indicator of value.
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It's actually great that you never heard of it. You missed an opportunity to lose some money. :)
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What an opportunity! 😆
!CTP
The foundation should be solid, knowing where you are going is as essential as knowing how to get there.
You don't just move because you can move.
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This is deep.
However this part
is a bit complicated in the crypto space, where new paths and limits are explored continuously. Ten years from now knowing how to get there should be clearer for many types of crypto projects.
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Hahaha, intention is the main thing about building.
It ought to be clear at this point what crypto projects are doing but some have just the bad foundation.
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I became a very strong advocate of, "do not invest more than you can lose". This is the perfect proof of this saying. Thanks for sharing.
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That's the first rule of investing. Otherwise, you're gambling with your life.
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The golden rule to not put all your eggs in one basket and to take profit no matter how much faith you have on the project :)
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This is very important! People sometimes forget this.
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That's true and I am guilty of not doing this one :)
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i should buy Cardano maybe.
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sure, if you did your research... :)
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