What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

Luna and UST collapsed quickly after being attacked by financial giants, which not only caused the sudden death of Terra, a large-scale public chain ecosystem, but also had a very adverse impact on the entire encryption world.

After the outbreak of this incident, what do encrypted VCs and some well-known KOLs in the circle think?

Myth #1: Algorithmic stablecoins are not an engineering challenge, but fundamentally flawed

Regarding the serious de-anchoring of the UST, John Paul Koning, a researcher in monetary economics and monetary history, commented:

What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

“It’s time to stop viewing algorithmic stablecoins as engineering challenges (“thinking that after a few failures, there will be a successful iterative product”) and instead start viewing them as fundamentally flawed products (ie, no more engineering can’t fix them.)
Some people are asking what kind of stablecoins are algorithmic stablecoins, Dai, Rai, and USDC are not algorithmic stablecoins, Luna, Empty Set Dollar, and Dynamic Set Dollar are algorithmic stablecoins, and some , for example Frax (and Nubits) are partially algorithmic stablecoins. By
“algorithmic” I mean that stablecoins do not use 100% independent collateral to achieve stability, it relies on mechanisms such as freezing, binding, or something like Load-balanced equity coins like Terra.

Myth 2: Losing money, gaining the skills and knowledge needed to succeed

Haseeb Qureshi, Partner at Dragonfly Capital:

What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

4 lessons about losing a lot of money (from someone who has experienced multiple losses)
1. Humans are resilient and we get used to things surprisingly fast. When you lose everything, you feel hopeless on the first night, gloomy on the second, and by the next week you can control your emotions, and then by the next month, you will forget The pain of losing everything. You’ll be fine, I promise.
2. There is no free lunch, and whenever you think you’ve found an easy way to make money, you’re probably missing something.
Advantages are constantly gained through hard work, and the reality universe will teach you a lesson in painful ways.
3. Everything is compound, when you lose money, you grow skills and knowledge, and these only grow.
A lot of my knowledge and experience comes from my past failures, and people who experience failure for the first time have no chance. 4. You
build real wealth by doing what you love. Because if you don’t like it, you’ll give up too soon.
Crypto has been pronounced dead too many times (see https://bitcoinisdead.org) and I know a lot of people who came early but left the field because they lost faith.
Y’all will make it (YGMI!), I mean it. ♥️

Myth #3: The deal to compete for L1 is over

Vance Spencer, co-founder of Framework Ventures:

What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

“Competitive L1 transactions are over, people will value decentralization and stability, multi-chain means multi-chain within the ETH ecosystem, modularity/data availability is also good, and everything else is not. Cross-chain bridges are a Disaster, the economic security of competing L1 is impossible, and much of the traction of competing L1 is an inorganic mirage.
We don’t need to keep relearning this lesson.

Viewpoint 4: The crypto winter is here, prepare for the long-term

Jason Choi, Partner at Spartan Group:

What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

“Even though we’ve been in a bear market for 6 months, this event feels like Bitconnect in January 2018, an event like this killed retail risk appetite and marked the beginning of a long crypto winter.
If you are Founders of crypto projects, then it makes sense to be prepared to go through 12 months – 24 months…

Matt Huang, Co-Founder of Paradigm:

What do crypto VCs think of the crypto tsunami caused by the collapse of Luna?

“Every generation relearns the lessons of leverage, whether explicit or implicit. (2-3 years for crypto generations)”

What did you learn from this event?

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-do-crypto-vcs-think-of-the-crypto-tsunami-caused-by-the-collapse-of-luna/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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