Thread by @Jun_Yu

1/ To summarize my thoughts on the recent #LUNA event:

I had a chat with them in 2018 in the private round when I was in charge of investment at OKex. I met Do Kwon and Daniel three times. At that time, Terra team didn't want to develop a stablecoin project, but offline payment.

I was not optimistic at the beginning and passed this project. But someone in our investment team liked it so much that OKex decided to invest. It turned out that the project was one of OKex's highest ROE project ever.

2/
For those of us who have been in the industry for a long time, we may not be interested in this kind of thing at first. Its ecology is like flying with the left foot on the right foot. Everyone with basic physical common sense knows that it cannot fly, right?

Just like there is no perpetual motion machine in the world, #LUNA feels like a perpetual motion machine. It generates electricity for itself and blows up the bubbles by itself. If you think carefully about it, you can identity its huge risks.

3/
In fact, in a sense #Luna's collapse was inevitable. In fact, the reason is very simple, is that if many people feel that something is likely to happen, then it will happen sooner or later.

Now many people also feel that Luna is a hidden danger, will burst, then this thing happened today, this is in line with Murphy's law, we also counted witness to history.

4/
We still have to have respect for this industry. Each round of bull market does have a lot of money quickly project, many people make money quickly, but do not easily get lost.

This industry is a little too high-profile, too so-called unbeatable, and even forget some of the most basic laws of the jungle in the field of finance. There is a very important principle in the field of finance, is not to let others know your cards.

Do Kwon's move is like carrying a bag of explosives to the square and saying, "I'm going to die with you, who dares to snipe me?" The old foxes on Wall Street don't care how many people you'll kill, they'll snipe you out in the open.

5/
I think that #LUNA cannot back to its original price after Tuesday, but it came to zero in three days. I remember that during the subprime mortgage crisis in 2008, it took only a few minutes for Lehman Brothers to go from tens of billions of market capitalization to zero.

In a mature capital market, everyone could foresee the ending of zero, so everyone would step out. A few days ago, many people were still buying at the bottom of #LUNA, which shows that many individual investors in this industry are still too naive.

6/
The overall impact of the Luna crisis on the crypto industry should be less than the impact of the 2008 subprime mortgages crisis on the financial industry, because the penetration rate of $LUNA/ $UST is much lower than the CDS penetration rate of that year.

It will dampen everyone's confidence in short term,and other projects in similar models. The entry of mainstream Wall Street institutions, on the one hand, is a challenge to crypto, on the other hand, it is a good thing for the crypto industry, which adjusts the valuation.

People should keep rationality, and strive for building good projects.Since another project in the market has become more and more popular a month ago, I have been pouring cold water on it, everyone should not easily believe a high-yield story that packs a web3 coat.

Let's ask where the revenue comes from. There is no permanent Motivation. Indeed, the early ecological construction at the beginning requires some overdrafts in the future, but the important thing is whether this account can be made up in the future.

A large part of the reason for #LUNA's collapse is that it owes too much to make up. Similarly, I see that there are still some projects in the market that owe debts that are difficult to make up in the future.