Written by Marc Demar
I’ve been following the aftermath of the total collapse of LUNA and the UST “stable coin”. It has sent shockwaves through the crypto community and affected the lives of many people who had put their trust – and savings – into a protocol they believed was rock solid.
UST was the central narrative of Terra’s growth story. And Anchor protocol, offering a hefty, but stable 20% APY earn rate on deposited UST, was fueling a whole ecosystem of innovative protocols. Ultimately, the promises of lossless investments and guaranteed yield attracted many.
Promises of easy money always do. Terra was like a castle, big and beautiful, but as it turns out, it was sitting on weak, contracting soil with a bad foundation, causing it to crack and sink, pulling it down.
The collapse was swift. Attempts to jack it up failed miserably and only time will tell whether affected people will get (some of) their money back. The proposal to fork the network and airdrop new LUNA to UST/LUNA holders will most likely pass, but that seems mostly due to the voting power of validators, while the wider community broadly opposes the idea and is looking for real and tangible compensation rather than being airdropped new LUNA on a UST-less network, most of which has a vesting period of 2 years.
The phrase “if it sounds too good to be true, it probably is” cannot be repeated enough. And here’s another one: “Don’t put all eggs in the same basket”. And what about “only invest money you can afford to loose”?
Everyone should put these 3 phrases on their fridge (or tattoo them on their arm) so they are reminded every single day. But from what I read – with the collapse of Terra – many appear to have lost their life savings, college funds, retirement funds or whatever. Heartbreaking, but it is always avoidable. It doesn’t mean Terra bears no responsibility. It simply means promises of easy money come with high risks. Never, ever put all your money in high risk baskets.
I have another important phrase. Not yet tattooed on my arm, but it definitely deserves a spot:
“Utility, utility, utility“
Many believed (or still believe) in “guaranteed profit” just because an NFT is an NFT. A diminishing number of people have made millions. Many lost money. If a few pixels sell for millions, does that sound too good to be true to you?
The connection with Somnium Space Metaverse?
I purchased land in Somnium, NFTs if you will. The key reason for doing so was because they come with unparalleled utility. If you’ve ever looked around in Somnium and observed what people are building – and I am not only referring to venues, but also businesses – you will know exactly what I mean. Owning land in Somnium Space is like owning a piece of the Metaverse. It comes with an inherent value that is yours to fully explore and utilize.
It’s what every NFT should be like if you ask me. Something that – once you own it – opens doors. Doors to knowledge, personal development, new friends and more.
Does that mean you should use your entire college fund to buy virtual land? If you read the article you already know the answer.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in ETH, CUBE, MATIC, LINK, VET, LPT, NEAR, ATOM,
UST and owns Somnium Space NFTs….and good old shares and some money in a mattress… kind of.