#TerraLuna Lessons Learnt
What can we learn from the collapse of one of the biggest crypto ecosystems, $Luna and $UST?
Here is what you need to know.
/THREAD
What can we learn from the collapse of one of the biggest crypto ecosystems, $Luna and $UST?
Here is what you need to know.
/THREAD
Too big to fail.
• There are no impregnable castles.
• There are no irreplaceable people.
• Neither crypto ecosystem is too big to fail.
“Things always become obvious after the fact”
/1
• There are no impregnable castles.
• There are no irreplaceable people.
• Neither crypto ecosystem is too big to fail.
“Things always become obvious after the fact”
/1
Black Swan.
This is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.
Black swan events are characterized by their extreme rarity, severe impact, and widespread insistence they were obvious in hindsight.
/2
This is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.
Black swan events are characterized by their extreme rarity, severe impact, and widespread insistence they were obvious in hindsight.
/2
Systemic Risk.
This is a risk inherent to the entire ecosystem like #terraluna or market segment like algorithmic #stablecoins.
This undiversifiable risk can affect the overall crypto market, not just a particular project or token.
/3
This is a risk inherent to the entire ecosystem like #terraluna or market segment like algorithmic #stablecoins.
This undiversifiable risk can affect the overall crypto market, not just a particular project or token.
/3
Reflexivity.
Reflexivity is a theory that positive feedback loops between expectations and fundamentals can cause price trends that substantially and persistently deviate from equilibrium prices.
This can move the price up when is hope or down when is a resignation.
/4
Reflexivity is a theory that positive feedback loops between expectations and fundamentals can cause price trends that substantially and persistently deviate from equilibrium prices.
This can move the price up when is hope or down when is a resignation.
/4
Principles.
Principles guide us in a complex market, especially during a high volatility.
Great principles could be used in many areas, not just in crypto.
@chrishlad has a good example of Timeless Principles:
/5
Principles guide us in a complex market, especially during a high volatility.
Great principles could be used in many areas, not just in crypto.
@chrishlad has a good example of Timeless Principles:
https://twitter.com/CryptosEngineer/status/1519741159026966529
/5
@chrishlad Learn from the best.
You don't need to know everything, but you should know people who know it.
@TaschaLabs analyze @terra_money fallout from a macro and crypto lens:
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You don't need to know everything, but you should know people who know it.
@TaschaLabs analyze @terra_money fallout from a macro and crypto lens:
https://twitter.com/TaschaLabs/status/1526276308119932928
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@chrishlad @TaschaLabs @terra_money Valuation.
Valuation in crypto works, until it stops working.
All pricing models have their own assumptions. You should understand them before you will use them.
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Valuation in crypto works, until it stops working.
All pricing models have their own assumptions. You should understand them before you will use them.
https://twitter.com/CryptosEngineer/status/1486697280690442242
/7
@chrishlad @TaschaLabs @terra_money Market cycles.
Market cycles are affected by:
1. Economy and profit cycles
2. Tendency of psychology to overreact to developments in the environment
3. How risk is considered
4. How market prices reflect positives and negatives
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Market cycles are affected by:
1. Economy and profit cycles
2. Tendency of psychology to overreact to developments in the environment
3. How risk is considered
4. How market prices reflect positives and negatives
/8
@chrishlad @TaschaLabs @terra_money Risk.
Most of us underestimate risk and don't know how to manage it.
Risk management is the most needed when it's too late.
/9
Most of us underestimate risk and don't know how to manage it.
Risk management is the most needed when it's too late.
https://twitter.com/CryptosEngineer/status/1522641852301684738
/9
@chrishlad @TaschaLabs @terra_money Take profits.
Everyone is talking about taking profits. This is hard but it is one of the most important skills in high volatile markets.
/10
Everyone is talking about taking profits. This is hard but it is one of the most important skills in high volatile markets.
https://twitter.com/CryptosEngineer/status/1517030624611209216
/10
@chrishlad @TaschaLabs @terra_money Returns.
What are the assumptions and drivers behind the expected return? What is the probability?
What is the source of investment return (positive expectation, competitive advantage, explicable market edge)?
How long this investment return must persist to be profitable?
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What are the assumptions and drivers behind the expected return? What is the probability?
What is the source of investment return (positive expectation, competitive advantage, explicable market edge)?
How long this investment return must persist to be profitable?
/11
@chrishlad @TaschaLabs @terra_money Mistakes.
All our mistakes can be categorized to:
1. Analytical/Intellectual♟️ (too little or incorrect information, wrong analytical process)
2. Psychological/Emotional✨ (greed and fear, ego and envy, willingness to suspend disbelief and skepticism, extrapolating past)
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All our mistakes can be categorized to:
1. Analytical/Intellectual♟️ (too little or incorrect information, wrong analytical process)
2. Psychological/Emotional✨ (greed and fear, ego and envy, willingness to suspend disbelief and skepticism, extrapolating past)
/12
@chrishlad @TaschaLabs @terra_money Tokenomics.
Tokenomics can make a difference between good and bad investments.
The token is a proxy between a successful project and our returns.
/13
Tokenomics can make a difference between good and bad investments.
The token is a proxy between a successful project and our returns.
https://twitter.com/CryptosEngineer/status/1518601178195628032
/13
@chrishlad @TaschaLabs @terra_money Follow #terraluna experts to better understand the current situation.
@Route2FI
@danku_r
@CryptoHarry_
@thedefiedge
@terra_valley
@terranaut3
@GabrielGFoo
@jwang815
@Shigeo808
@TheMoonMidas
@crypto_rudd
@phtevenstrong
@Caleb_TWT_
/14
@Route2FI
@danku_r
@CryptoHarry_
@thedefiedge
@terra_valley
@terranaut3
@GabrielGFoo
@jwang815
@Shigeo808
@TheMoonMidas
@crypto_rudd
@phtevenstrong
@Caleb_TWT_
/14
@chrishlad @TaschaLabs @terra_money @Route2FI @danku_r @CryptoHarry_ @thedefiedge @terra_valley @GabrielGFoo @jwang815 @Shigeo808 @TheMoonMidas @crypto_rudd @phtevenstrong @Caleb_TWT_ If you enjoyed this and want to learn more about investing, cryptocurrency & finance:
✔️ Follow me @cryptosengineer for more threads like this.
✔️ Check out some of my other threads:
/15
✔️ Follow me @cryptosengineer for more threads like this.
✔️ Check out some of my other threads:
https://twitter.com/CryptosEngineer/status/1486395562618503172
/15
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