How did I contribute to UST / LUNA collapse? My confession...

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$UST / $LUNA death spiral is one of the biggest disasters in the crypto history. Who is guilty? @stablekwon? @LFG_org? VCs? Apes who overinvested without understanding the mechanism of the system? All of them. But it's also me. And maybe you too. Read my confession. 👇

I first learned how $LUNA and $UST worked after the crypto crash in May 2021. I was a degen farmer then and I had a fraction of my stablecoin portfolio in UST on @mirror_protocol but I wasn't really aware of UST mechanics. I thought it was just another exotic stablecoin.

When crypto prices plummeted $LUNA MC suddenly became lower than $UST MC. It clearly undermined the faith in UST and could have led to the bank run. By then we had already seen many other algo-stables failing. UST could have been another one... twitter.com/dcfgod/status/1396540470805753856?s=20

I decided to cut my losses and capitulate on $UST below the peg. At that time I didn't know much about #Terra and its powerful backers. But I had experienced other failed experiments and learned not to wait too long when a bank run scenario was probable.

It turned out later my panic wasn't necessary. $UST restored the peg quite quickly (probably with the help of substantial external capital of $LUNA investors). But my faith in $UST / $LUNA system was shattered for good.

I expressed my lack of confidence in $UST and $LUNA in various private groups I'm in, e.g. @DeFiOmega: - "UST is just bad model for stablecoin" - "Reflexivity is good on the way up because LUNA is burned. But on the way down it puts the whole ecosystem at risk."

Conversations with #LUNAtics, in which I was fudding $LUNA, let me realize this community was extremely strong. Strong Community + Ponzi Mechanics = Substantial Profits I bought LUNA in August 2021 shortly before it reached its new ATH. I could respect the pump happily.

But the fact I became $LUNA holder didn't change my perspective on the whole system. I still considered $UST and $LUNA as a faulty mechanism and expressed my opinions openly in the private groups, even though it meant I was fudding my own bags.

This is when I plead guilty to $LUNA collapse. Although I never endorsed $LUNA or $UST on my Twitter profile, as I didn't want to lure anyone into this game of musical chairs, I also never publicly said anything against it. I shared my fud in private groups but not publicly.

@Arthur_0x published a good thread today which can be summarized by the below quote. We often don't express negative opinions on projects. We don't call out bullshit, scams, faulty designs. Some do but most choose neutrality. twitter.com/Arthur_0x/status/1525812319800143872/photo/1 twitter.com/Arthur_0x/status/1525812319800143872/photo/1

I did the same with $LUNA / $UST. Although I had serious concerns regarding the system design, I decided not to share it publicly. I didn't want to fight with $LUNA fanatics unable to accept any constructive criticism. But I should have. And you should have too.

@FreddieRaynolds, @0xHamz and others who publicly shared their views on $UST and $LUNA probably had to deal with a lot of negativity from #LUNAtics but even if they helped a small fraction of their followers to not go all-in into $UST or $LUNA, they did an admirable job.

If we want this space to progress, we should hold ourselves to higher standards. We can either restrict crypto to an online casino or literally build a better financial world. The latter sounds better but requires more responsibility and courage. Be the change you want to see.