Almost Liquidated! 😱 😲 .:. Terra LUNA UST Fiasco Experience

in LeoFinance18 days ago

When you can learn the most about a certain thing? In hard times, when you make mistakes, when you FOMO or FUD, when you lose money, etc... In those moments, you learn the most, and not just that, you remember well what you did wrong! Learning and forgetting after a while has zero value, but taking out valuable lessons and reminding yourself next time, is the best that can happen to you... It hurts, but that's the way how you grow!

So, yesterday was one of the craziest days in the crypto markets for a while... It showed us how many different assets are connected to each other and when one goes down, the other follows... It's sad to see some people making fun of LUNA and UST in these hard times for them, without noticing that the hole that has been dug is also in their wallets, too! Bitcoin went down yesterday following NASDAQ, but the fall was even more empowered by the sell-off that Luna Foundation did to protect their stablecoin... And all that pulled down all other cryptocurrencies, even those that people who were making fun have!


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There is no "safe stablecoin" and what happened yesterday to UST, could happen to ANY other stablecoin... Even fiat currencies aren't the same today, as they were yesterday... Inflation is killing them... Yes, you see the same numbers, but their power isn't the same as before...

So, I would like to share some of my mistakes and "good moves" (maybe... time will tell) that I have done in the past 48 hours regarding this LUNA-UST situation... Any of this isn't financial advice, it's just what I have done, and what are my opinions about it... If you get into a similar situation, you should do whatever you think it's right to do and not blindly follow others...


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Firstly, I'm not an "old LUNA" HODLer as I have ignored the whole ecosystem because of a lack of time for researching... I got into the LUNA almost at the top (how convenient... lol...) and that was probably my first mistake... That was kind of FOMOing into it at those moments, but I had some reasons to do so and we will come to those reasons very soon...

Maybe a bit more than a month before, I have watched a couple of YT videos with people explaining different strategies to earn higher yields by lending and borrowing crypto... As UST was one of the stablecoins with the higher APR, I have decided to research more about the ecosystem, wallets, earnings, bridges, etc...

The idea was to provide LUNA as collateral and borrow UST... Later on, with that UST buy more LUNA and repeat that process... Well, that was the SECOND mistake... To provide LUNA as collateral and borrow UST! Why? At these moments everyone knows why, but I wasn't alone before "not seeing" the reason before... The problem is when UST lost its USD peg, the price of LUNA went down, which is obvious (now)!


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Now, it's time to look on the bright side... As I said, I did use LUNA as collateral, but I have added ETH also, just to make the whole borrow more resistant and diversified! As a matter of fact, my ETH collateral was almost at the same level at LUNA, so the risk was split between 2 tokens... That was a crucial move that kept me "safe" from liquidating yesterday! So, note for the future, pick carefully which asset(s) will you use as collateral for your loans!

The second positive thing regarding all this mess was actually the point that UST lost is peg! Wait, what? Yes, you read it right, that was a positive for me... but why?

I said that I watched videos with those "loop strategies" for earning more UST, but I didn't say that I did that! As a matter of fact, I did something completely different... And we are back to the beginning of this post and my reasons to borrow UST... In those moments, there were discussions about getting HBD on Polycub, which happened a bit later... So, my idea was to exchange UST to HBD and instead of earning 20% on Anchor protocol, actually earn up to 40% APR in Polycub! Which I have done by exchanging my UST to HBD and deploying them into the pHBD-USDC pool on Polycub!


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So, long story short, yesterday, before going to bed, I exchanged some BUSD that I had in my wallet for UST at a rate of around 0.85 (yes, it dropped even more later, but I wasn't on the computer), and got almost 20% more UST... I went to Anchor and repay over half of the debt that I had! I left some more if UST falls more the next day and will probably repay that too, soon (depends on the price)...


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Now, there were other options on how to play out all this, but again, I have my reasons and beliefs for doing it as I did... Also, I do believe that UST will recover the peg, and I do believe that LUNA will survive... That's the reason why I didn't sell my LUNA which is still in my wallet as collateral... I know that price still tanks, but I will keep HODLing it as my investment in LUNA is less than 1% of my portfolio... Even if it never recovers, it will not be a huge hit to my pocket...


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I hope that this "adventure" will help you in something and I would like to hear what are your thoughts about all this LUNA-UST fiasco? Did you invest something into LUNA or UST? How did you play out this?

Thank you for your valuable time,

~ph~

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Sounds like you definitely played it well. Glad it didn't affect you too much.

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Regarding my UST, yes... but I have still lost a lot as I had (and still have) LUNA tokens... :)

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I am a total mess: I purchased 169 LUNAs some months ago and left them on the exchange...how ignorant of me!

Darn! If you bought them a few months ago then you had a nice entry price... It's easy to say that you should sell for around $100, but nobody expected something like this... :(

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I was doing my research on whether get into UST to get the lucrative APR. Some YouTube videos popped up. Getting 20% APR on Stablecoins was insane back then.

In the end, I decided not to get into UST.

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Well, it looks like you did well... :) But, if they didn't do 20% APR on UST, I doubt that we would have that here on HIVE, and also on many other blockchains... Someone had to start the trend, but it turned bad for them... I hope that others will survive and UST will get back to its peg...

!LUV

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I am an outsider, I was surprise huge fluctuation like this. I am waiting and see what gonna happen.

It was a surprise for everyone in crypto and a very important lesson for all... Not just LUNA and UST investors... ;)

!PIZZA

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I did not FOMO into LUNA even though everyone was talking about the 20% return and I never really trust those infinite loops. I have always been hesitant about putting up crypto as collateral because it's so volatile. It's nice when the prices go your way but it can get nasty quite fast.

Also, I don't know if I would have picked that PolyCUB stablecoin pool because of the early harvest penalty. It would be hard to get back the full return if you needed the funds quickly.

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Well, the coin has two sides... If we look always from the sidelines, we will probably stay where we are... Not every investment in crypto is bad, but there are situations like this one of course...
I have learned my lesson from this one, but I will not stay away from crypto because of this... It has just strengthened my beliefs in blockchain tech and crypto in general... ;)

!LUV

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Luckily for me, I'm new to the crypto world but I know that now that I'm I to the crypto world, sooner than later I will start having so e experience of these things and I'm privileged to read from those who have experience. I just hope I'll be wiser when that time comes.

I'm happy you won't be losing too much if Luna never rises again. Thank you for sharing your experience with us.

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Thanks for the comment and what you said was my intention by writing this post! To help others to try to avoid mistakes that I have done and show others that these things will come... The most important is to be prepared and to NOT invest more than you can afford to lose!

I saw some terrible stories from people that had 100% of their portfolio in LUNA! That's crazy... Always diversify and never invest more than 5% of your portfolio in new tokens/projects...

!LUV

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Great, thank you for your advice. I will put this into consideration when I want to invest in any coin in the future.

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At what price will you buy LUNA back, @ph1102?

At the moment, I'm not considering buying LUNA at all... I still didn't sell my holdings and I will probably continue to HODL as the value is ridiculously low...

!PIZZA

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interesting strategy. thanks for sharing with us! good luck with the luna hold. i was considering to buy some under $1.

Price under $1 is stupidly low... So, investing a couple of bucks maybe it's not a bad idea... I wouldn't go into it with bigger amounts...

!PIZZA

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seems crazy! !CTP

Hope everything is ok on your end! I wasn't involved in this whole LUNA/UST yield project, but I do have some LUNA tokens that I bought late last year and early this year. Not a huge portion so no issue for me. Sometimes I think I over-diversify into too many things but at times like this, I am thankful I did.

Sometimes I think I over-diversify into too many things but at times like this, I am thankful I did.

You did well... This is a confirmation that you did well... Next time when you think that you are over-diversified, remember this event :)

!LUV

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Hmm, tough moments... Did you get liquidated after all when UST dropped to 30c or with your actions you managed to avoid it?

I have some LUNA-OSMO and UST-OSMO on Osmosis. I practically can't do anything about it since they are on a 14-days lockup period (they call it bonding, but it's different than what bonding will be on PollyCub), I'll just wait and see if they'll recover. LUNA certainly WON'T start to recover before UST reaches its peg.

Well, I had bLUNA as part of my collateral and some ETH... So that helped to avoid liquidation... I bought some UST when it was going down and repay my debt... Today, I have sold some of my UST that I didn't want to sell down, so in a nutshell, I got slightly in profit with my UST "trading" during all this shit...

As LUNA is extremely low, I bought just a couple and pooled on Astroport... Just gambling thing... lol... Fee rewards are great, and my bonded LUNA is locked similar to your case... So, I said, screw that... lets go deep... hahahaha... JK.. it's like 10-20$ with these prices... :)

!PIZZA

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I want more LUNA too. But I want UST to reach its peg first, or LUNA will keep diving to support UST.

I changed my mind. I saw on @dalz.shorts that LUNA's supply increased 10x. That looks very bad in light of a potential future recovery.

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That's the way how the LUNA-UST works... one burns, the other prints... Anyways, your idea about buying when/if the peg is recovered, isn't that bad at all... I will follow closely how it develops...

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That's the way how the LUNA-UST works... one burns, the other prints...

That's true. But it would take forever for the supply of LUNA to be burned to lower levels. Because I doubt UST will break peg to the upside. That's what it would take to burn tons of LUNA.

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