Edglad:
Here’s why you’re NOT making money in crypto, and how you can take action to change that today

When I first got started in crypto, I had no process, did no diligence and aped into “calls” based on influencer telegram chats. I lost money buying Safemoon and Pitbull late because my friends were shilling them to me and made a lot of money.

What were my major problems?

1: I had no structured process. I didn’t have a standardized idea funnel, I didn’t know how to spot scams or watch wallets and my entries and exits were all emotionally charged.

Edglad:



3: Activity. When you first get started making trades on DEXs, you think you’re a VC and should pull the trigger on as many ideas as possible. The problem is if you’re over active, you are NOT doing proper diligence on each project, you don’t know the catalysts.


You don’t have conviction and you aren’t keyed into the communities or know where to look for alpha. Being over active also means you tend to be buying high and selling low, and moving too fast.


My best results in crypto have either come from (1) moving fast but only on key new launches or (2) buying very, very slowly. Buying slow on a project smooths out your average cost, which in alts that move +/- 20% per day, can be your best friend.

Edglad:
$100,000 in a bank account earns less than $100 per year,

$100,000 invested in an S&P 500 index fund can earn over $10,000 per year.

You cannot save your way to wealth, you must invest.

The wealthy understand this.

Edglad:
For those of you going through alot of hurt and having no visibility into whats going on. I got this from a friend. Please share with the community. I'm sure alot of people have no clue wtf is going on. Prayers to you all.
Calculations for $UST and $LUNA (#copied)

Edglad:


UST has a circulating supply of 12.12B
- It has a market cap of $7.4B
- To restore peg 12.12B - 7.4B = 4.72B of UST needs to be burned
- Terra validators have overwhelmingly agreed that this is what must be done, UST must be burned and peg must be restored
- To burn UST



and restore peg), you need to mint new LUNA
- To burn 1 UST you need to mint $1.00 worth of LUNA
- Let's do some simple math
- To burn this 4.7B of UST we would need to mint $4.7B worth of LUNA
- At the current price of LUNA ($0.03), this means we would have to mint ~156B LUNA

Edglad:



In this scenario, the circulating supply of LUNA would increase from 3.5B to ~160B (increase 45x)
- The price of LUNA will decrease to ~$0.0006
- Now you could in theory begin to slowly burn down that 160B circulating supply of LUNA (does this sound terrible?)

(IT SHOULD SOUND IMPOSSIBLE AND LIKE A TERRIBLE INVESTMENT)
- The scenario described above is a made up fantasy and is not possible
- What's really going to happen is actually worse
- First problem: You can't burn all 4.7B UST at once because you can't mint 156B LUNA at once

There is a limit on how much LUNA can be minted in one day
- Right now, they are voting to increase the limit
- This leads us to problem #2
- Second problem: As you mint LUNA, the price of LUNA goes down (LUNA is diluted), which means to burn more UST,

Edglad:


you need to mint even more LUNA, until you descend into a vicious feedback loop of all out LUNA minting madness
- This is referred to by validators and people who understand the protocol as the "death spiral"

Right now you can burn $1B UST by minting 33B LUNA
- The circulating supply of LUNA goes from 3.5B to 38.5B
- The price of LUNA is now 0.0027 (lower now)
- You then burn your next $1B UST by minting 1,000,000,000/0.0027 = 370B LUNA

You burned your first $1B UST by minting 33B LUNA. The next $1B UST by minting 370B LUNA
- The next $1B UST would take trillions and trillions of LUNA
- $1B chunks just as an example
- Obviously the size of the burns would be much smaller as it depends on UST holders' bags

Edglad:
@Terra Ecosystem Revival Plan

There’s been several community and validator groups discussing launching a fork of the Terra chain to make the ecosystem whole from the UST depegging event. Wanted to offer my perspective on how this should be done.

As of this time, there are still several billion dollars worth of UST, and the value of Luna token has fallen to essentially zero. Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, the holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes. While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role.

So what remains? While UST has been the central narrative of Terra’s growth story over the last year, the Terra ecosystem and its community is what is worth preserving.

We’ve built up one of the largest and most vibrant developer ecosystems in crypto, with some of the smartest minds in the world working on products with the best UI/UX
Terra Station has a large install base, with million+ users across the world
Although in distress, strong brand recognition and a name that almost everyone in the world will have heard about
The Terra community must reconstitute the chain to preserve the community and the developer ecosystem.

Validators should reset the network ownership to 1B tokens, distributed among:

400M (40%) to Luna holders before the depegging event (last $1 tick before the depeg on Binance should be reasonable), bLuna, LunaX and Luna held in contracts should also be recipients, minus the Terraform Labs account at terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6. The new chain should be community owned. Preserving decent ownership of the network in its strongest believers and builders is important.
400M (40%) to UST holders pro-rata at the time of the new network upgrade. UST holders need to be made whole as much as possible
100M (10%) to Luna holders at the final moment of the chain halt – last minute marginal luna buyers should be compensated for their role in attempting to provide stability for the network
100M (10%) to the Community Pool to fund future development.
All Luna besides the third tranche should be staked at the network genesis state.
The network should incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees.
Call to action

Why does this redistribution make sense? UST holders need to own a large share of the network, as the network’s debt holders they deserve to be compensated for the tokens they have been holding to the end.

Terra needs a community to continue to grow and make its blockspace valuable again – the only way to do this is to make sure that token holders before the attack commenced, the most loyal community members and builders, stick around to keep providing value.

It is a hard balance – and no easy answers in redistributing value within the network. But value must be distributed to allow the ecosystem to survive, and in its current state it will not.

The future of the Terra Network

The rallying cry for the Terra community has always been “a decentralized economy needs decentralized money”. This is an exciting vision, and while UST has not been successful the Terra community will find ways of iterating on the idea at some point in the future.

But the priority now should be to preserve this amazing ecosystem and to make as many users and builders as possible. Terra should first preserve its L1, and the community should gather to discuss decentralized money once the dust has settled.

I hope the community can achieve speedy consensus on how to revive the Terra ecosystem. I’ll always be here.

Edglad:



Kindly read and share your opinions

Edglad:
The term “ponzi” is thrown around a lot in DeFi - particularly for protocols like $strong.

It's a concept we all need to understand, and which has nuances that are typically not explained well.

Here's what you need to know about ponzi schemes & ponzinomics in simple terms:

Edglad:


1/ The name “Ponzi Scheme” comes from Charles Ponzi, an Italian immigrant to the US.

In 1920, Ponzi launched a money-making scheme involving postal reply coupons (PRCs)

When post was sent overseas, a PRC could be attached to pre-pay for reply mail.

Edglad:


2/ Ponzi noticed an arbitrage opportunity.

PRCs had different prices in different countries.

He came up with an idea of buying PRCs in a country with cheaper postal rates, and selling them in a country with more expensive postal rates.

3/ Ponzi started looking for investors.

He promised investors he'd double their money in 90 days.

Demand skyrocketed.

After 90 days, many investors decided to compound their initial investment, hoping to make even more returns

4/ However, the problem was that Ponzi didn't actually exploit the arbitrage opportunity he had told everyone about.

Instead, he was paying out old investors with money from new investors.

If new investors didn't come in, old investors couldn't be paid.


5/ Ponzi was making over $250k a day in 1920, and was living an extravagant lifestyle.

However, questions started to emerge.

Journalists at the Boston Globe and Dow Jones & Co realised that there weren't enough PRCs in the world that could sustain these types of returns.

Edglad:


6/ The scheme collapsed.

The scheme had become so massive that upon its collapse, six banks were brought down.

Investors lost their money, and #Ponzi was sentenced to prison.

7/ Taking a step back, we can understand a @Ponzi scheme as a financial scheme which defrauds investors by:

• promising them a high return,
• lying about what investments will be made with their money,
• paying old investors with $$ from new investors.

8/ Under this, old investors can only be paid if new investors come in.

If you're an early investor, you have a lower risk of not having your capital reimbursed.

And it's because of this dynamic that the first investors into a ponzi scheme are the ones that benefit the most.

9/ These then are the basics of a ponzi scheme.

In the DeFi space, we're seeing many protocols adopting ponzi-style methods of getting new investors.

This has given rise to a term "ponzinomics".

It must be stressed again, ponzinomics ≠ a ponzi scheme.

10/ This is because ponzi schemes involve defrauding investors.

Investors have no idea that part/all of their investments go to paying out older investors.

Most node protocols, on the other hand, are explicit about investments from new investors going towards old investors.

11/ Ponzinomics needs an increasing supply of new investors coming into a protocol in order to sustain emissions paid out to existing investors.

That is unless a protocol can convince investors not to cash out (e.g. to compound nodes).

12/ At some point ponzinomics becomes unsustainable.

This happens when the rate of new investors coming in drops below the rate of emissions that protocols need to pay out to existing investors.

I'll explain with a simple example:

Edglad:


13/ Let's say Serena invests $100 in a node that promises her $2.22 a day.

So in 90 days the protocol will owe her $200 - she makes a 100% profit.

That $200 has to come from 1 new investor (+ Serena's initial $100).

14/ However, let's say that after 90 days, Serena doesn't cash out but compounds her node into two nodes.

After another 90 days, the protocol now owes her $400.

15/ This means the protocol needs 3 new investors to pay out Serena (in addition to Serena's initial $100).

However, the protocol will try and incentivise Serena to keep compounding.

If Serena chooses to compound, the money stays within the protocol.

16/ This can spiral out of control.

Serena could choose not to compound further and just cash out $400 every 90 days from her two nodes.

Just to pay Serena, the protocol would then need 4 new investors every 90 days.

16/ This can spiral out of control.

Serena could choose not to compound further and just cash out $400 every 90 days from her two nodes.

Just to pay Serena, the protocol would then need 4 new investors every 90 days.

18/ As time goes on:

• the amount of emissions protocols need to pay investors grows exponentially, and
• the more investors there are who start taking profits (by selling tokens).

As token supply increases faster than demand, prices start falling.

19/ In order for protocols to shift away from ponzinomics to sustain these emissions, they need to innovate and create products that generate significant amounts of revenue.

The longer it takes for them to innovate, the harder it is to pay out emissions.

20/ This takes place due to two reasons.

The more time that's elapsed:

(1) the more nodes investors have compounded, and
(2) more new investors have joined the protocol and are owed emissions in perpetuity.

(Assuming no supply-side policies are introduced - eg node caps)