This piece will be a little different. There is no analytics. There won’t be many numbers here; no dive into the economics of the failed Luna experiment. If you want a “normal” article like that, I wrote a start-to-finish piece breaking down the whole debacle as concisely as I could here.
This is just a piece from the heart, about why this week has made me sadder than any other week I can remember, and a look at the aftermath of the collapse. The human side of it all.
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And hey, there’s a thunderstorm raging outside as I’m writing this here in Medellin, Colombia; the weather matching my sombre mood quite poignantly.
Luna was worth $42 billion at its peak. UST was worth $19 billion. This wealth has all evaporated. Of course, financial assets go up and down all the time, but not like this. You’re not meant to see an entire ecosystem go to zero in the blink of an eye. Drop 99.999% before you can say “life savings”.
Many lost it all – literally every cent. There are horrific stories going around of people getting liquidated for all their worth, losing money that friends and family had invested, pensions wiped out, college funds gone.
There are forums with suicide stories already. If you’re one of those people, please reach out for professional help – money isn’t worth it, and there are several resources online and already being posted in the big Luna threads. You can and will bounce back from this (my Twitter DMs are also open if you just want to talk).
$1 million would have bought 8,000 Luna coins a month ago. Now that one million dollars is worth 90 cents. But it’s more than money that has disappeared here. Terra was a thriving ecosystem, with dozens upon dozens of amazing projects hoping to make a real difference in the world. People worked for years on DApps, experimental projects, NFT collections – you name it.
Big platforms like Anchor were at the forefront of DeFi. This time last week it had $17 billion in total value locked (TVL) on the platform, most from investors using it as a savings account to earn the interest rate on what they thought was a safe stablecoin, UST. That stablecoin is now trading at 21 cents, while nearly all the value in the platform has flooded out (at highly reduced rates, given the loss of the UST peg).
And most importantly, it was on the Terra blockchain, which was yesterday shut down temporarily and looks like it could disappear entirely.
Mirror is another example – a tokenised stock platform where one could buy and sell stocks on the blockchain. Their token is down 98% from its highs, with similar capital outflow. All the work of so many developers, marketers, community moderators, investors etc – poof.
Chai is (was?) a mobile payments app highly popular in Korea. It had raised $45 million in a Series B top-up round in December, following the $60 million raised the previous year. It had recently launched in Vietnam and Thailand, and as of Christmas was processing $6 billion in transactions on behalf of over 2,200 merchants. But unfortunately, like the other examples, it’s built on Terra.
I could go on, but you get the point. All that blood, sweat and tears – not to mention money – just gone.
It’s the human element of all this that is getting to me.
VC funds and early investors will have still made incredible returns out of their Terra investment. There are some saying Terra even hold some of their Bitcoin, which is trading north of $30,000 per coin.
But start-ups, entire platforms and, as always, the average investor, are left holding the bag. And in this case, the bag is 99.99% empty. It wasn’t a meme coin; it wasn’t a joke – this was a top 10 coin and a reputable project. This was never in the script, and especially with a stablecoin involved, people trusted it with large amounts of their wealth.
There’s more to life than crypto, which is important to remember if you are caught up in all this mess. I know it’s bad now, but it will get better with time – just like any pain: breakup, bereavement, and so on.
I’m happy it’s Friday; I need this weekend, it’s been a heavy few days. I’m looking forward to just closing my laptop, turning off the news for a bit and going outside. I’ll watch some football, and cheer on my fantasy team (on the bright side, I have a chance to win my league – something that I have never had before – so say a prayer that Heung-Min Son can continue his electric form for me).
Fantasy football seems silly, but I enjoy it – and at the end of the day, it’s those little things that matter. I’ll message my non-crypto friends, shamelessly rub it in their faces as Harry Kane does nothing, but Son collects two goals to win me the title. They have no interest in crypto, which will be refreshing this weekend.
It’s football, movies and drinking with friends for me – but whatever that thing is that you enjoy, that is still there. Go do it.
And so will the people in your life. Go talk to them.
There’s an entire world out there beyond crypto. Sometimes it’s nice to remember that.
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