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Week of Woes: What Did We Learn and What Now?

Sometimes decades happen in weeks.” Boy, does that ring true this week.

Covered:

  • Crypto is Young
  • Crypto is Going Nowhere

Crypto is Young

This week has left many searching for answers. Why has this calamitous event happened with crypto at the exact same time inflation numbers have wrecked equities? For many, it feels like the sky isn’t falling, but has fallen. What can we learn from the Terra debacle? What does this say about the overall outlook for crypto? There are certainly lessons to be gleaned from this firehose-like downpour of events.

First, crypto is young. That is the succinct takeaway. The nascent technology and the pitfalls therein have been writ large by the “game-theory gone wrong” with Luna and UST. Algorithmic stablecoins in general, are known to be an economic concept riddled with holes and vulnerabilities. What’s worse, when the “de-peg” event occurs, the most likely outcome is total collapse. We have seen this with the Mark Cuban Iron Finance debacle, and it has led the oldest algo-stable in the game, DAI, to collateralize its holdings in USDC, which is veritably backed by cash reserves.

Algorithmic stablecoins are structured in such a risk-heavy way that the only option to mitigate utter collapse is by holding actual dollars, or a stablecoin with actual dollar backings, like USDC. What we can glean from this event is the days of an algo-stable being collateralized by another risk asset, like LUNA, or BTC, are over. Because crypto is a young, totally immature asset class, we are learning the hard way. Fortunately, such a cleanse in the market should engender risk-averse rationality that is not conducive to haphazard speculation.

Moving fast and breaking things was the ‘renegade innovator’ strategy that ended up causing this collapse. Prudence will soon take over the market, and real world use cases will be required as a collective market ‘check-box’ for any project. As Tascha Labs mentions below, ‘real adoption’ is required. Terra relied on a fly-wheel, short-sighted, and inflationary economic structure relying solely on Anchor protocol. Like a “ponzi”, new demand was needed like a hard drug to keep the wheels on. Unfortunately, the situation degraded to such a degree that the Terra chain stopped altogether today, a final, tragic salvo.

Crypto is Going NowhereĀ 

Now, for the good news. The underlying technology behind blockchain is not harmed due to this. The consequence will be rootless speculators leaving the market. While that may affect the ability for ‘number going up’, it ultimately is needed to strip the market of its addictive framework. Coming out on the other side is a market that has a rational predilection, and views the asset class as not just a hapless speculators’ playground, but a serious, emerging industry that can totally redefine the centralized bounds of the internet, ownership, and currency.

Cryptocurrency and blockchain can redefine what it means to engage with value. Money markets in DeFi, borrowing and lending, have already revolutionized our ability to leverage our money without the need to employ a middleman. This is done through smart contracts, virtual machines, and consensus mechanisms. These benefits are indisputably moving the needle in a direction of economic freedom hitherto impossible. Crypto assets give you control over your money. No longer do you need to consult the services of entities to leverage your ‘value.’

Cryptocurrency allows for a sovereign foothold on ownership, money, and all the accoutrement therein. That is going nowhere. Web3 and crypto offer the ability for users to own and benefit from their identity, value, and creations. Before, this was benevolently delegated to entities that profited off the convenience of your participation. In this Web3, crypto economy, there is true democratization of identity. Your value, and the ability to leverage it as you wish, opens doors to sovereign accessibility that were not possible in the old regime.

In this Web3 world, Finance, and the trapping and trimmings of your output, become much more conducive to your own desires, needs, and abilities. you do not cede control and authority where it is not required. That is democratization. That’s worth sticking around for.

Recommended:Ā The Bob Ross Approach To Investing In Crypto

The post Week of Woes: What Did We Learn and What Now? appeared first on CryptosRus.

Ether

#Ether #TheSupremeTeam Artist Name: Ether Who are you? I am going to be the hardest rapper spitting the realest shit. Where are you from? I'm coming out of Detroit baby. The music scene out here is booming with versatility. How can we follow you? N/A Song Title: Merry go round Listen to Ether: https://soundcloud.app.goo.gl/UGzyS Source:::Listen

#Ether #TheSupremeTeam
Artist Name: Ether

Who are you?

I am going to be the hardest rapper spitting the realest shit.

Where are you from?

I'm coming out of Detroit baby. The music scene out here is booming with versatility.

How can we follow you?

N/A

Song Title: Merry go round

Listen to Ether:

https://soundcloud.app.goo.gl/UGzyS

Source: https://supremepr.us/

Week of Woes: What Did We Learn and What Now?

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