A lunar eclipse to remember

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May 12, 2022: A lunar eclipse… like no other… unfolds

May 19, 2023. A recounting… of witnesses… 1 year and 1 week afterwards

2022 was a year of reckoning for the crypto industry. 4 witnesses recovering from the lunar eclipse, take to the stage to discuss their experiences. The discourse is led by Cryptonosis.

Cryptonosis: (sitting on a stool) May 12, 2022 was a day to remember in crypto history.

To turn on the lights for those who may be in the dark, let’s set the scene of what happened.

The third largest stablecoin at the time, terraUSD a.k.a UST with a market cap of $18billion lost its peg to $1 on May 7, 2022. And its collateral token LUNA which was supposed to act as the guarantee for the peg, literally crashed and went bust from $80 to cents in a matter of days. And on the fated May 12, lost 96% of its value in one day!

And all of this was triggered by an initial swap of funds ($85million to be precise) from UST to USDC, which caused the initial depeg on May 7.

How did it all go wrong? Why didn’t we see that coming?

Witness 1: It went wrong before it started. Some saw it coming. I saw it coming. Four years earlier. I flagged the model would only lead a death spiral.

Witness 2: (shaking head) Maybe you did. But no one out there told me. I just saw this token pumping and I wanted some of it. It looked legit to me.

Cryptonosis: (speaking to Witness 1) Explain what’s you mean. The model was wrong?

Witness 1: (speaking firmly but thoughtfully) Yes. From my analyst’s lens it was pretty clear. You peg your stable coin to a token. If the stablecoin depegs, your investors panic. Guess what? They want to cash out of both your stablecoin and token. The token price falls, the peg falls even harder and they both facilitate the downward spiral.

Witness 3: (fiercely) In this case the lunar dragged us all down with it. We were once crazy – yeh and proud to be called lunar-tics. But no more.

Witness 2: (solemnly) It’s been a long, sad ride back to basics. I took a break off defi, crypto, everything.

Cryptonosis: The dreaded capitulation.

Witness 2: (throwing arms up in the air) Call it whatever term you want. I lost life savings of millions in that storm.

Witness 1: Didn’t you realise something was wrong.

Witness 2: Yeh, like people talked. But you know, they talk all the time. They shout, Don shouts, we the community shout even louder… it was all a mess. No one knew what was going on.

(looking around at Witness 3 and 4) Or was it only me?

Witness 3: (jittering) Some of us knew, but we buried our heads and hoped for the best.

Cryptonosis: What do you mean?

Witness 3: I mean, it was kind of obvious. 19% returns on Anchor. Come on! No one was doing that anywhere else in the world of defi. But we just kept yield farming 247.

Cryptonosis: So, you’re telling me you suspected it was fishy?

Witness 3: I wouldn’t go that far to call it that as I just knew it was some scheme and if I could get my cash out on time, I was good.

Cryptonosis: But you didn’t get your cash out or did you?

Witness 1: Don’t look at me, I didn’t invest but was badly scarred with the community, nonetheless.

Witness 3: I go nothing out. Nather.

Witness 2: Sadly, just got a few thousand bucks out not even close to my initial investment. My fund was rekt-ed.

Cryptonosis: (speaking to Witness 4) And how about you? You’ve been quiet.

Witness 4 (almost whispering): Mine was the other way around. I didn’t even invest in that darn token until it began to crash. I think it was day 2 or something. Everyone told me that the Don was going to sort it out, and had Bitcoin stash to balance things right. So, while others were cashing out, I was swapping in.

Witness 1: Wow. That’s rough.

Witness 4 (pulling up a hood as though feeling a sudden chill): You have no clue. Lost it all in hours – within blinks.

Cryptonosis: (speaking to Witness 2) You managed a fund right, that invested in this? What was the fall out?

Witness 2: Fear. Terror. Denial. Anger. But nothing compared to seeing the triple arrows shot at other funds which just hit them out.

Cryptonosis: What would be the key takeaway from all this?

Witness 1: DYOR isn’t enough anymore. Somethings just don’t check out instinctively, work with your guts even if everything on paper looks good.

Witness 2: Lower risk. Lower appetite. Slow and steady wins the race. That’s my new fund investment approach.

Witness 3: Greed doesn’t pay. I’m saying this to myself. I regret that I had once that mindset to yield farm at the expense of someone else’s investments fuelling my profits. Lesson learnt.

Witness 4: (emphatically) Stay out of the lane of a crashing token. FULL STOP.

(suddenly bracing up) I mean no one gets in the lane of a crashing car or jumps onto the track of a train that’s about to wreck…

Witness 3: (interjecting ironically) Except yur superman or something.

Cyptonosis: Indeed. It’s been a crypto year of discords like no other. Thank you for respectfully sharing your stories in this discourse.

(looking out at the crowd) How do we summarise an episode of this magnitude?

Despite its weight, I’ll give it a go.

It’s the dawn of a lunar eclipse

And yet the day is still dark

Dark as night

Normally an eclipse is foretold

A pre-warning given

Experts foreseeing events

Before they unfold

Make it known to those

Who would like to behold

The spectacle.

But no degree of spectacles

In their intensity

Could foresee this one coming.

Sure! Sure! Some did see…

Did predict…

Did scream…

“It’s a pun-zy scheme!”

“It’s a crazy hoax!”

But shouts are usually not helpful

In this world where the loudest voice

Crowds out the rest.

Until Boom/Crash/Bang

Dang! Dung! Is all that’s left

Ding! Dong!

And then suddenly

The lights flick

Turns on in the mind

To see the fluke

But turns off the mind

That sees the flake

(sighs)

It’s been a whole year.

A year of reckoning.

And some have carried on regardless

While some have been scarred on regardless

The anchor no longer anchored.

The lunar no longer lunared.

What happens when the light of night falls away?

The peg that guarantees its day gives sway…

The peg is gusted

The lunar is busted

We’re here reminiscing to get us guts

To face another day

With brace and grace

While the lunar’s out for good

The sun’s out for good!

Another sun for another day!

Another grace for another brace!

(sitting up and cleaning his glasses) And while we’re on the topic of spectacles and lenses…

While one anchor protocol sunk to the deep, another lens protocol rose to the view…

Started by a defi team with a differing view… which just marked its first year.

Perhaps there’s more sunshine to arise on this cryptic, blockchain horizon.

(putting glasses back on) Let’s see. Let’s see!

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Disclaimer: Crypto Currency Drama Club is a work of satirical faction – weaving facts with fiction and completely a work of creative imagination of the authors. No real people have been used in this episode or narratives. And the portrayal of witnesses in this episode is a complete work of creative imagination.