Decided to whip up a quick blog post to let you know that it isn’t always sunshine and rainbows. I guess history has a knack for repeating itself!
It wasn’t too long ago that I wrote this blog post in May 2021 and it is a timely reminder of why I don’t write too much about crypto DeFi on my blog.
Boring content on earning stablecoins yield was definitely the right move for this blog. When shit inevitably hits the fan, I don’t actually have to deal with any people at all.
Market crashes are humbling experiences. It forces me to reconcile the risk level that I THINK I’m comfortable with against how I ACTUALLY feel when market volatility hits.
Putting the takeaways into action
After my experience last year, I have been gradually de-risking from crypto. This was the obvious elephant in the room that I needed to address.
For Syfe REIT+, the size has slowly ballooned from $30,000 to $145,000 over the past year.
The passive route is what I’m taking for this allocation and in return, I’d get a few hundred bucks a months for my efforts.
People taking advantage of chives 韭菜
The crypto boom created a huge opportunity for everyone to make money. Sometimes, this was at the expense of others.
Whether knowingly or unintentionally, the unbelievable quality of some of the content being put out was definitely somewhat of a top indicator.
When the author has zero idea what he is saying and yet, he tries to teach others on how to make it. I’ll leave it up to you to decide whether it was negligence on their part.
Many people got hurt because they didn’t really understand the algorithmic stablecoin that they were getting into. It has a complex underlying mechanism that one can easily miss if they don’t read the docs.
- When I buy UST, I take on the risk of depeg. But 1 UST can always be burned for $1 of $LUNA which can then be sold, right? Right?!
- If I use collateral like bonded Luna and bonded Eth to borrow UST, is my depeg risk then non-existent? Since a lower UST price means that my loan is cheaper to repay anyway?
Unfortunately, the effects of depegging introduced new unknowns into the equation which was what many did not planned for. Perhaps we can ask the folks who got liquidated this morning because the Terra blockchain was congested and they failed to repay their loan in time.
I was lucky that my debt ratio was fairly low which gave me enough time to navigate the meltdown. Some didn’t even have time to respond as the price drop could be extremely rapid.
If anyone is gloating over the predicament of people today, I guess they’re simply rotten on the inside.
The lost of money can be very traumatizing and many would be questioning why this is happening. Although my Terra portfolio is a kaput right now, I knew this situation could happen one day, and this is the gradual process by which an algorithmic stablecoin attempts to re-establish its peg. (Read the docs)
I don’t blame anyone, and there is a reason why I hasn’t shilled Anchor Protocol on my blog. The risk IS significant.
Some might know that the Terra ecosystem will always hold an important place in my heart and I’m undoubtedly biased towards it. To me, Terra has earned its place in crypto (for better or for worse) regardless of what happens in future, which basically translates to mean that I’m always a Terran.
At the end of the day, I’m not here to say what projects are ‘good’ or what projects are ‘bad’. As always, I constantly remind myself not to fall in love with any projects and not to repeat the mistakes of 2018-2019.
Besides, I’m just a nobody here trying to survive. The golden rule is to take profits, always. I also bought a little UST at 80c
so let’s see how it goes and it got rekted, sold at 70c.
Update (1) 14 May 2022 : In case it wasn’t clear, I have made a lot of friends via the Terra community since 2020. And for the past week, I have spent a lot of time chatting with people who are feeling very down right now. Even till today, I’m still trying to help (with my meagre knowledge) people who’s trying to salvage whatever that is left of their assets on the Terra blockchain, such as bridging their bonded Lido assets back to their native chains.
Update (2) 14 May 2022 : Even in traditional finance, these things can happen. The risk is even higher in DeFi. Although I mostly write about stablecoins yield, there remains a chance that those platforms can fail as well, which explains the disclaimers.
A painful double whammy
Taking hits on both the TradFi and DeFi fronts is not fun at all. I suppose cash really is king these days.
A quick check on my net worth (updated with today’s prices, excluding HDB value) revealed that it is down by a steep 23% since the highs of end 2021.
In comparison –
- S&P 500 is down 16%
- Nasdaq is down 25%
- Bitcoin is down 33%
Not good at all. If you’re hurting, know that you’re not alone and there will be newer opportunities to make the best of it. Till next time then!
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Hello! I’m Kevin, Turtle Investor
At the age of 30, I am the Personal Finance Blogger who laid claim to a negative net worth of minus $25,755 – and decided to turn things around.
- Seven years later in 2019, I hit CPF Full Retirement Sum (FRS) of $176,000 without making a single cent of CPF top-up
- In nine years, I have added more than $1 million to my net worth
- I earned over six-figure in alternative income in 2021 in addition to my full-time job
I am married to a lovely wife and that means dual income with no kids. In my free time, I chase miles so that we can fly in business class. My hobby is making pocket change off this blog and sharing everything I know with you!