Thread by @29Reconnoiter

1/🧵 My $Luna Journey & Why I am Upset/Disappointed
Many are mad at/disappointed in #DoKwon #Terra_Luna #LFG , #influencers etc. I am NOT. I am upset w/Myself bc I know better. This isn't my first rodeo.

2/ Some may feel a couple of my comments to be a little harsh but I hope you see the balance in my assessment should you read the entire thing. I will address 5 Red Flags I ignored & Humbly give some suggestions for the future based on what I've learned from others & myself

3/
1) How this could've even realistically worked w/the US Gov
2)Echo-chamber in the community
3) Over-leveraging strategies/Number go up
4) Do's actions/comments
5) The community's reactions to Do's behavior/comments & the unwavering idol worship

4/ A little context: Bc I worked for 1 of biggest global financial firms in late 90s/early 2000s I had front row seat to #TechBubble. After I went against my nature & got hammered due to margin I called the housing bubble/collapse & accumulated cash, waiting patiently.

5/ TBH it took longer than I thought to implode. Everything reminded me of 1987-92 cycle. I even had a "Joe Kennedy shoe shine moment" within 2 mos of the housing peak. Got involved 5-6 yrs ago in crypto & lived through ICO boom (Toppy signal) & #CryptoWinter

6/ 1st read about Luna in April '21 & asked younger protege of mine about it. He only knew that Novogratz was seriously involved. Revisited after stumbling upon more detailed/explanatory article in mid-Oct '21. It all clicked. Decentralized stable already working in S Korea

7/ inside their version of @Venmo . Helped me understand the possibilities. I knew how critical stablecoins were to system bc avg person needs EZ on/off ramp sometimes not even knowing they're using #crypto. Purchased a decent amt for me & began phrophetalizing to others

8/ It was something which could across all chains. Simple yet critical. Not competing w/ Layer 1s in the way most do. I wanted to help UST succeed. I was ready to reach out to contacts in different communities to help integrate. I DM'd a few people in the Terra community

9/ Including Do about pointing me in the right direction. I can now count myself lucky bc no one responded back. Started listening to #Luna Twitter #Spaces & found some very bright people & perceived input into the ecosystem. Everyone was typically nice & helpful.

10/ My only initial concern was how US Gov would handle stablecoins especially decentralized. In maybe my only other thread I raised this concern by summizing UST could at least be a niche product around 🌎 & Luna would rise bc of it. I should've considered this more deeply

11/ After 1 month of spaces & observing Do, I started seeing some red flags by Thanksgiving. Spaces/CT becoming more of an echochamber. I get it. People are excited/belong to community which they feel will lead them to a better life. To be fair it's same w/ $BTC & $ETH maxis

12/Each community becomes very #tribal & feel like they've got it figured out more than the rest & become extremely dismissive. News alert! If your chain was the only answer there wouldn't be #Devs creating new ones every year to solve the problems yours has.

13/ To be clear, this was not a Luna problem. This IS a crypto problem & powers in charge love to use it against this community in Valid ways. I have previously commented on how everyone should celebrate success from any & all projects. Do Not celebrate other's stumbles/failures

14/IMHO it would b wise if Everyone got off their high horse & not celebrate @terra_money demise. For many, the visceral reaction was to Do's behavior & I understand but when this happens it stains the entire system & we should make a healthier & less insecure environment

15/ 3rd Red Flag> Over-leveraging. I began to notice obsessive talk about creating more Luna out of thin air beyond just the normal arbitrage opportunity. More & more borrowing to take advantage of these schemes. One of the craziest abuses of the system was @MIM_Spell which

16/was draining the reserves. Concerned me bc I remember & was burned by Big #Margin during 2K tech bubble. This also played into TVL which was rising. I thought, this isn't real bc people were not using fresh $ to add to system. They were borrowing 6 times over & more on @Kucoin

17/ It is bc of these previous red flags but primarily bc of Do's immature leadership & community's idolization that had me seriously considering pulling out on 3-4 occasions. Got to the point where I stopped listening to the spaces & going on CT around March 1st.

18/I went against my Cardinal Rule > Invest in people, Not just companies/projects. Not only intelligent but High Emotional IQ & altruistic values. There are many good people at @terra_money & inside community & I wish them well. My heart aches for those financially ruined

19/ & worse, those who took their lives. I cringed at the way Do handled interactions on CT & some interviews. Some have said regardless of Do's behavior this would've happened. Mostly disagree. While possible, I feel it significantly less likely to happen for following reason

20/As an #algorithmic #StableCoin founder people will question its viability. It's all in the way one handles it. Best leaders aren't only patient/respectful w/ people directly in their orbit or whom they feel are important. When you are dismissive & chastising some Luna holders

21/ who are critical pieces of the community, it's a bad look. Major Red Flag. When you are not overly arrogant & worse, cocky, there are holes in your system or with your team you will miss. Pride comes before the fall. It is inevitable.

22/When one reaches extreme arrogance/cockiness there are inevitable #BlindSpots which Will Be Exploited, especially by people who feel alienated or dismissed as stupid. @Microsoft did this to people in 90s & threatened legal action when they were just pointing out faulty code

23/Cyberhacking community was kinda born out of this. Then there was the idol worship & getting caught up in Do "dunking" on people. No one could question anything about Do. People got defensive. One might ask, "What kept you from bailing on project w/ all of these red flags?"

24/ It came down to handful of very smart & in some cases highly sophisticated investment groups whom I assumed they had done their due diligence & were advising Do & would help him mature into the role. I believed they understood crypto & Terra better than me. They have large

25/ staffs able to do more research than me & have inside knowledge of the workings. Once again, I am taking all the blame for my decisions & will continue to follow many of them for future insights. W/ all of this being said, IF Do returns wiser & w/Humility, & starts a new proj

26/ I would be open to investing again. He is an intelligent guy. But the lesson must actually be learned, & the humility must be genuine. Believe me, you can pick up the cues as to whether he has changed if you know what to look for.

27/ Understand that the main thing is #CryptoAdoption Not just one protocol. It will not be like what you hope for or have in your head. At least not in the next decade, or maybe ever. There will be compromise. Be positive & tribal about the community at large, Not just one proj

28/ So, if I may humbly suggest the following:
1) Cardinal Rule> Invest first in the people, not idea or proj. W/out the right person at the helm, the project most likely will fail, even if a great idea.
2) If any part of it seems too good to be true, it usually is

29/
3) Be wary of margin/leverage. If you or a few people are the only ones utilizing a leverage strategy it could work for a while but usually not indefinitely. If you promote this leverage strategy you are speeding up the bubble & its popping.

30/
4) Think in 2nd, 3rd, & 4th orders & apply inversion. Hedge your bets in a variety of ways. As
@nntaleb
says, if you're not #hedging for #TailRisk, you are Gambling, Not Investing. Also Diversify. Do Not put All of your eggs in one basket.

31/ Work on your Patience & Crypto #FOMO . When I first worked in Pro Baseball an old scout 30 yrs ago from W Coast used to tell young scouts & executives, "Don't worry about missing out on a player. Clang, clang. They are like trolley cars. Another one will come along in 10 min

32/
6)People who have acquired wisdom over the years have relevance. Don't immediately dismiss them bc "they don't get it". Apply their knowledge & constantly question Your beliefs. Remember, #technology changes but human nature unfortunately doesn't & this is where age helps

When you *ARE overly arrogant

https://twitter.com/29reconnoiter/status/1526675949131075584