Bitcoin’s genesis block is historic, not just because it contained the first 50 bitcoins, but because it had a message coded in the hash code: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

This reference to the 2008 financial crisis from Bitcoin’s creator, the pseudonymous Satoshi Nakamoto, is often read as an indirect mission statement: The financial system could be redesigned, money could obey immutable laws written into code, and finance could flow unimpeded. Bitcoin would be decentralized, beyond reproach and beyond manipulation.

However, it seems that the crypto industry, rather than recreate a trustless and egalitarian digital economy, has been dogged by in-fighting. We have recreated a techno version of the Old System, where greed for yield led people into convoluted and dangerous profit-maximizing strategies.

The meltdown of TerraUSD (UST) – which was once the third-largest stablecoin by market capitalization, which was once famous for offering a 20% annual percentage yield on deposits in the Anchor protocol and which was once going to make a lot of people very rich – appears to be total. This time there are no taxpayer bailouts.

Terra’s collapse, coupled with a consumer price index of 8.3%, has led to selling across the crypto markets. Bitcoin buckled and is now below $30,000, with alternative coins faring no better as investors either sold into BTC or exited into cash.

Due to its algorithmic design, UST has a price that moves in sync with the price of Terra’s native cryptocurrency LUNA. The bank run that disentangled UST’s peg to the U.S. dollar also collapsed LUNA’s price, which crashed over 99% in two days to less than a cent. Earlier this year, UST and LUNA had a combined market cap of $60 billion, and now it’s under $7 billion.

The fallout has just started. There are yield aggregators that use UST as collateral and God knows what other complex financial strategies built on top of UST that are now at risk. People have lost their life savings; there are tears and depression.

It’s not surprising, then, that blockchain analysts are already finding evidence that UST’s meltdown was caused in some part by sabotage. It seems an unknown actor dumped $84 million of UST exactly one minute after Terraform Labs had withdrawn capital to fund its new “4pool” on Curve. That helped cause UST to deviate from its peg, which started the avalanche of panic selling and liquidations.

Kwon reminds me of another crypto folk hero, Daniele Sestagalli, the founder of Wonderland Money and a celebrated crypto developer. A series of liquidations plus revelations that his business partner was a convicted criminal led to a complete loss of faith in his projects. Sestagalli has yet to make a comeback.

I’m not naive enough to think that the lessons learned from today will lead to a kumbaya situation where the proverbial lions lie down with the lambs. However, we are seeing strength from bitcoin and the faith that it and other quality assets will withstand this pressure and that as long as they do, Satoshi’s dream will live on.

This content was originally published here.

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