After Terra's Collapse, Cryptoverse Reflects on ‘Ponzi-like Assets’, Role of VCs, and 'Ignorant' Crypto People
It’s time for some self-reflection in the crypto community after the spectacular collapse of the terraUSD (UST) stablecoin and the entire Terra (LUNA) ecosystem.
A debate about what crypto investing should be like, how crypto projects are promoted and whether ‘bitcoin-only’ is the best strategy to follow for average investors, has now re-emerged in the community.
Among the key points of contention in the discussions is the role that large venture investors had in promoting Terra-based assets to retail investors, who in many cases had seemingly little to no understanding of the underlying economic model UST and LUNA was based on.
“It's time to stop promoting ponzi-like assets as ‘blue chips’,” wrote the crypto trader and economist Alex Krüger. He added that there should be “no more deceptive marketing,” and said exchanges should not list “ponzis” even though “high volumes drive fees.”
“The only redeeming point is it happened now and not later after much increased adoption and market cap,” Krüger added.
Meanwhile, Udi Wertheimer, a Bitcoin (BTC) proponent and developer, said that what shocked him the most about LUNA’s collapse was “how many investors didn’t understand the dynamics AT ALL.”
“I didn’t believe it would implode right now, but understood the dynamics and what a crash would look like if/when it does happen,” Wertheimer said, adding that buying only bitcoin is “a reasonable strategy and it’s what I recommend to most people.”
However, Wertheimer noted that there is an important distinction between recommending bitcoin only and calling everything else “a scam,” saying the latter will make people “ignore your advice when it matters most.”
Taking the same argument a step further, Nic Carter, another popular Bitcoin proponent
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