22 lessons the crypto market will teach us in 2022

22 Lessons Crypto Markets will Teach Us in 2022

Original article by Edgy 

Deep Tide TechFow

1. Locking tokens is not worth it.

在 DeFi 中，ve 经济学的锁定机制曾几何时变得很流行。你把你的 Token 锁定一段时间，作为交换，你获得额外的收益或效用。

结果是有些人看着他们锁定的 Token 在熊市中下跌了-90%。我更喜欢保持我的 Token 的流动性。

2. There is no "smart money."

All the "smartest" people in the field are losing money (3AC, Alameda, VCs).

Great chess skills, an MIT degree, and coding skills are not enough to stop greed and poor risk management. Don't invest in a project just because it has the backing of a big name.

3. Nothing in cryptocurrencies is too big to fail yet.

Please remember:

- 3AC

- FTX

- Luna

4. Question the Treasury's actions.

The Treasury of agreement is its lifeblood, and no money means no agreement.

1) 3AC secretly manages some agreement Treasury;

2) Some founders secretly traded with their Treasury.

Bad financial management destroys good projects.

5. Bull markets are easy, but not every protocol will survive the cryptocurrency winter.

Always ask yourself:

1）协议的资金来源是否在其原生 Token 之外？

2) Do they have enough runways to survive for more than 2 years?

3) Are their costs reasonable?

6. Protect yourself against rumors of bankruptcy:

- "They are stable";

- "FTX bankruptcy probability near 0%".

When things are about to happen, protect your money. No one else will do it for you.

7. Beware the cult of personality.

"Power corrupts; absolute power corrupts absolutely".

Every leading man has fallen this year.

- Daniele Sesta

- Do Kwon

- Zhu Su

- SBF

You can ride with them on the way up, but get out quickly before the inevitable crash.

8. Algorithmic stablecoins are still a pipe dream.

UST collapse;

Bean bad debt;

FEI/USN closed down;

The USDN/USDT is trading below its peg.

People will continue to try to make these experiments work, but I'd rather hold a fiat backed stablecoin and watch it from a distance.

9. Cross-chain Bridges are dangerous.

Vitalik warned us about security issues with cross-chain Bridges:

Axie's Ronin Bridge ($624 million);

Solana's Wormhole ($326 million);

Harmony Bridge ($100 million);

Nomad ($190 million).

When you use a cross-chain bridge, you add additional risk.

10. There's no such thing as free income:

20% Anchor UST;

5 percent bitcoin yield via CeFi.

Companies market these products as if they are as safe as banks. But the yield comes at the cost of high risk (-100%). It is perfectly feasible to store coins in a cold wallet and not earn any revenue.

11. Cryptocurrencies are still tied to the macro.

The Ethereum merger was one of the biggest technological achievements in cryptocurrencies, and unfortunately the macro winds were too strong for ETH to take off. The Fed's policy and interest rate decisions currently determine the market cap of cryptocurrencies.

12. Watch out for the halo effect:

-SBF on the cover of Forbes;

- FTX rescues BlockFi/Voyager;

- FTX sponsors sports players.

The halo effect means people don't do their due diligence, and if you throw enough money at it, no one will ask those hard questions.

13. Don't try to wait for the exact top or bottom.

You can never have perfect timing, and trying to time it can hurt your finances. A simpler strategy is to get out of a bet in a bull market and stay in a bet in a bear market.

14. There are still some games in the bear market.

We see the real gains narrative taking off around the summer.

Those who invested early in GMX and GNS were rewarded handsomely. There are fewer narratives in a bear market -- too many are forgotten before the macro picture turns around.

15. Adoption occurs when cryptocurrencies enter the background.

Most people on Reddit hate anything to do with cryptocurrencies, but Reddit's "digital collection" is sold out. The key is to make the encryption part invisible and frictionless while providing value.

16. Ethereum Tier 2 will live on.

Ethereum Tier 2 is sucking TVL away from knockoff L1 (Arbitrum and Optimism are both in the top 10).

Zero-knowledge rollups like Starknet and zkSync are coming. The future seems to be a battle between ETH Layer 2 and the application chain.

17. Historically, cryptocurrencies have operated on four-year cycles.

Towards the end of the cycle, you see people trying to prolong it.

- S2F chart;

- "supercycle";

- Bitcoin extension theory.

People are economically motivated to make you think the bull market is going to last longer.

18. If you don't know the source of the revenue, you are the source.

Do you remember all those node items? No one can answer where the benefits will come from.

Yields are coming from new entrants, so make sure you understand how value is generated before investing.

19. History doesn't repeat itself, but it often rhymes.

- Mt. Gox FTX;

- Bitconnect Terra Luna.

In the next cycle, we'll have a trading platform crash, in the next cycle, we'll have a new cult leader.

Human nature is hard to change, and it's up to us to warn the next generation.

20. To find FUD.

当 Token 大热时，周围只有一个声音，Fomo 心态使人们很难进行理性的讨论。

- They attack your character

- They dig up any old tweets they can use against you

So when you invest, look for FUD.

21. Humanity failed, but DeFi didn't.

The biggest disasters this year were human greed, risk management, fraud and bad decisions.

When CeFi companies became insolvent, DeFi loans were the first they paid back. Learn to trust code over people.

22. Learn how to take care of yourself.

无法掌握私钥，就不是你的 Token 。

看起来我们不得不在每一个周期中学习这个教训。交易平台里的任何 Token 都是「欠条」。

Token 不是你的，除非有硬件钱包来保护它。

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