My fellow retards,
The past week has taken too much attention away from the goats. While some have cheered at the demise of UST and then LUNA, they do not realize they are rooting for the failure of crypto as a whole. The complete upending of a $40b marketcap coin + a ~$20b marketcap stablecoin derived from the value of the former—not something that can be ignored. There will be a tremendous number of eyes from regulators, lawyers, media and more on this epic failure. This will result in greater scrutiny on the crypto ecosystem and it will likely slow down investment into those that are building ground breaking products for humanity.
After the fact, many point out the obvious nature of the LUNA ponzinomics. Yes, it is easy to say that afterwards. Much harder to stand in front of a million+ person ecosystem and extol to the masses their wild flaws. Some did—some saw it coming, and good on them to try to warn others, but clowns who point fingers now do not help—they just fan flames that threaten to sweep up much more than LUNA.
Señorita Yellen has already mentioned this situation. It is nigh certain that this will be claimed as grounds to regulate any algorithmic stablecoin going forward. Even much more safely structured stables (say that five times fast), such as DAI, may bear the brunt of the regulatory Warhammer.
So many negative aspects of this situation can be touched on, and they are being called out and discussed. Sad times when some in our community have chosen to take their own lives rather than live with the mistake of losing their family’s savings. Maybe that is an honorable path in some cultures, but it seems like lunacy to phon/ongod.
Instead notice a positive emergence: LUNA marketcap within seven days of its epic collapse: back in the billions. The marketcap is illogical…sort of.
If you let the LUNA game play out, UST will continue to be burned for $1 of LUNA every day up til the programmed daily cap (was somewhere ~$100m per day for a while). This means that the first $100m in UST that willingly burns their claim on a stable $1 token, instead gets LUNA printed out of nothing and sent to them for compensation. This obviously drives up the number of LUNA tokens, which went from the millions to the trillions in a few days. Nobody should want to hold LUNA if this mechanism is still in place. This should happen until all UST is exhausted and the system no longer has debt, at which point there will be many trillions or quadrillions of LUNA in a system that can now rebuild from a debt free blank slate. Essentially LUNA would have gone through a bankruptcy where equity holders (original LUNA holders) were wiped out and the debt holders were transformed to the equity holders of the new system. It’s kind of beautiful, but many in the LUNA space could not stand to watch the death spiral continue so they betrayed the UST guarantee and shut off the UST to LUNA conversion mechanism.
This slowed the bleeding, but then something else happened…
The price of LUNA began to rise. Yesterday it was up 100x from its lows.
With all the UST debt in the system, this is…curious. As of writing, marketcap for LUNA is over $1b. It is still a top 50 coin even after this epic collapse. This indicates something wildly positive about this project.
The market values the LUNA ecosystem. Death spiral economics remain unchanged, but the ecosystem has many positives going for it outside of just their broken ponzinomics. Incredible developer tools, defi systems, NFT projects and an engaged community is worth more than $0. Even though the base coin is in a horrible situation, the promise of the people warrant a billion dollar marketcap for the system.
This gives phon/ongod some hope. Ecosystems have value. Tokenomics can change…everything is a variable, but the base understanding here should be that we invest in the value of a community, rather than the value of a coin.
The community at Phonon DAO is building better, smarter, harder to break protocol-layer tools.
Tips to phonongod.eth will be invested in bounties that advance the Phonon project.
Hatemail to phonongod@protonmail.com will be scathingly considered.
Targets for the marketcap of PHONON DAO remain:
$1b by Q2 2022, $12b by EOY.
On the high end, $300b marketcap in 3 years.