On the anniversary of the Terra Luna (LUNA) disaster, the cryptocurrency community reflected on the teachings learned from the event that worn out $40 billion in value and caused Bitcoin to fall from $28,000 to $19,000. While the incident was undoubtedly heartbreaking for many who lost money, it was also a wake-up call for the industry to concentrate on liquidity, transparency and user protection.
Binance CEO Changpeng Zhao (CZ) shared the story of Bitcoin’s price movement tweet May 11, reminding of the LUNA disaster that took place a yr ago. CZ said there have been some beneficial lessons to be learned from this event. After the crash, CZ highlights the importance of transparency and user protection through its messages, including the “poor again” tweet.
To prevent government attacks following the numerous devaluation of the LUNA token, Terra blockchain validators stepped in on Thursday, May 12 to bring network activity to a halt.
Some community members expressed frustration that such an enormous crash could have happened in the primary place, while others pointed to the teachings they learned from the incident, akin to never trading emotionally and being strategic.
Obinna Uzoije certified data expert, he was talking concerning the must conduct due diligence of the projects under construction before starting the investment. Given that the cryptocurrency market may be very volatile, investing without proper knowledge can lead to significant losses.
Key lessons learned from the Terra LUNA disaster include due diligence. Performing due diligence on each project would save potential investors heartache in the longer term.
— Timothy’s Son (@ObiUcheUzoije) May 11, 2023
Another member of the LUNA community mentioned that a well-designed risk management system might help prevent cryptocurrency losses by providing a risk management framework and ensuring that investment decisions are based on sound evaluation and planning. This system may include setting stop-loss orders to robotically sell assets if prices fall below a certain level, diversifying investments in several cryptocurrencies and assets, and setting allocation limits for every asset.
It’s the anniversary of the LUNA disaster. Excessive exposure to such risks may very well be prevented with a well-designed risk management structure.”#crypto #DeFi
— CFC (@Dr_CFC2) May 11, 2023
Despite the frustration, many in the neighborhood praised a step taken by Binance within the aftermath of the crash. Binance allowed the Terra project team to compensate affected retail users first, with Binance receiving compensation last, if in any respect. They saw this as an indication that responsible leadership could make a difference within the cryptocurrency world. Some even identified that the incident was a catalyst for positive change within the industry because it forced corporations to reassess their risk management strategies and prioritize user protection.
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Overall, community response to the anniversary of the Terra Luna disaster has been mixed, with some still grieving the loss and others trying to the longer term with optimism. While the industry still faces significant challenges, it is obvious that the teachings learned from the incident still apply because the industry struggles with liquidity, interoperability and user protection. The LUNA outage shocked the industry, and community reflection provides insight into the importance of responsible leadership on the planet of cryptocurrencies.
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