Day to Day, Thoughts

Terra Luna Fallout – Retrospect & Takeaway

The Terra Luna fallout needs no introduction, especially since it had became global news and the impact was so great that it was the talk of the town amongst common folks who were totally clueless on cryptocurrencies. That had also painted a big red bullseyes for the regulators.

It also took quite a while for me to get a grip on the situation and understand what happened. A lot of people had been burnt by this fallout and some time is needed to calm down and assess the damage.

Brief Background

Unless you have been living under rock, here is a brief summary of what happened.

TerraUSD (UST) is an algorithmic stablecoin that maintains its 1:1 peg with the US Dollar via software logic instead of being backed by physical assets (unlike USDC). LUNA is the native token of Terra, a blockchain developed by Terraform Labs and is primarily used to operate the collateralizing mechanisms that ensures UST’s peg. USTs are minted by burning LUNA and can be also swapped for LUNA. For example, if the UST values goes above USD$1, the equivalent value of LUNA would be burned, which mints more UST, making it less valuable. If the UST price drops below USD$1, they are swapped for LUNA, which in turn makes UST more valuable.

Early this month, a large amount of UST was dumped, and UST started to de-peg. As it dragged on, with the backdrop of lack of official information, more UST was sold in mass panic. Hence it was not just a case of UST being de-pegged but it also had an effect of crashing the price of LUNA. With both UST and LUNA prices in free-fall, the rest is history.

Biggest run in crypto history.

Aftermath

Needless to say, it triggered a fallout on the broader crypto market as well as getting international headlines. Even Tether (USDT), another stablecoin, but backed by physical assets de-pegged for a brief period of time. A lot of people’s hard earn money went down the sink and talks about suicides were everywhere. I think it was the largest wipe out in the crypto market.

Personal Experience

I had done my research and knew of the risks involving algorithmic stablecoins and how Terra Luna works. I knew that it is a matter of time before a serious de-peg occurs and that the potential of a bank run is always there. Even with their Bitcoin and other reserves, it is in my belief that they are unlikely to survive a full run onslaught.

At that time, before the great crash, 5-8% of my portfolio is in UST and LUNA. I was expecting that I would have enough warning and buffer time to exit if I had to. In the end, I lost almost everything despite knowing what I had gotten into and having an “exit plan”.

Then came the de-peg and crash.

I didn’t expect it to free fall so fast and both at the same rate. The plan was to exit if there was a loss of more than 50% for LUNA. When the price of LUNA was around $30, I was considering selling it all, including UST. Actually, based on the plan, I WAS supposed to sell it all. But I hesitated, thinking that there was a chance that it might recover, despite all signs pointing to further free-fall ahead. It was sunk cost fallacy at work.

When I did finally wake up from my slumber, the price was at $8-9. I sold everything. And later on, out of greed and false hope that I could recoup some of those losses, I stupidly bought some LUNA at around $0.05, and you all knew what happened after that.

Retrospect/Takeaway

It was my first crypto crash. In the last major crash, I was only an observer and I thought I would have learnt from it. I was so wrong. It was very stressful to experience it first hand and for the first time and you really need steady nerves and calm mind to do the right things.

I had a plan, but my discipline to follow through with the plan failed. My emotion is the weakest link. You can make all the plans you want, but when the crunch comes and you could not execute, it is pointless.

Another thing learnt is don’t be greedy. Most of the time when you are too greedy, you lose more.

The fortunate thing is that because I had done my research and knew what risks of I am getting into, UST and LUNA did not constitute a major part of my portfolio, hence losses were limited.

There were two questions that I had been pondering about since I started my crypto journey and perhaps it might be answered this time.

  • Is it better to stake or earn/keep in CEX (Centralized Exchange)?
  • Compensation/Airdrops for staked coins vs coins in CEX?

Staked coins might not be easy to exit as compared to coins store in centralized exchanges. But in the event of compensation, in the case of LUNA, you will be the first to get airdrops but for coins in exchanges, you probably might get nothing at all.

That is why I am pleasantly surprised that Hodlnaut supports the new Terra Network airdrop.

Hodlnaut Supports the New Terra Network (LUNA) Airdrop

To my knowledge, they have been the only one that supports it and throughout this Terra Luna fiasco, they have been very professional and provide clear and timely updates. Major exchanges should be learning from them. Am certainly very impressed and I think they have a bright future ahead.

Moving forward

I still believe that there is future in crypto and it is just the beginning. However, we have to be realistic and looking at the path it took for internet to be part of our day to day life, it will be a rough journey ahead.

The lessons learnt today, I hope, would allow me to avoid making even more costlier mistakes in the future. Life is an on-going learning experience. And always remember, invest what you can afford to lose and always, always remember, there is more to life than dollars and cents.

If you are curious on what caused and how TerraUSD (UST) came to de-peg, you can check out the link below.

Nansen – On Chain Forensics: Demystifying TerraUSD De-peg

Day to Day

Happy Bitcoin Pizza Day and Thank You Coinhako!

Almost 12 years ago, a programmer was craving pizza. So, he bought two pizzas. What made it unique was that he paid for them in Bitcoin, the first-ever real-world transaction using cryptocurrency. 10,000 BTC was traded for 2 pizzas, imagine how much 10,000 BTC is worth right now! As at the time of writing, 1 BTC is worth SGD$ 41,487 or USD$ 30,072.20. You work out the math how much 10,000 BTC is worth now.

And thank you Coinhako for having the Bitcoin Pizza day contest! Love the prize very much!

Check out Coinhako – The platform to buy, sell and store your crypto assets. https://www.coinhako.com/affiliations/sign_up/173349_36362274

Day to Day

Coinhako – Minimum Earn Amount

Coinhako doesn’t seems to have a FAQ on the minimum amount of crypto that is needed for their Earn feature. Hence, I have consolidated a list here for easy reference. Hope it helps.

Coinhako Earn Minimum Limit

CryptoMinimum Limit
BTC – Bitcoin0.00175
ETH – Ethereum0.02325
DAI – DAI stablecoin10
AVAX – Avalanche0.5
AXS – Axie Infinity0.1
BNB – Binance Coin0.1
CRV – Curve10
DOGE – Dogecoin100
DOT – Polkadot2.77
GRT – The Graph10
KSM – Kusama0.1
LINK – Chainlink1
SAND – The Sandbox Token1
SOL – Solana0.55
USDC – USD Coin10
USDT – Tether10
XLM – Stellar Lumens100
XTZ – Tezos1
ZIL – Zilliqa1666.67
Updated as on 22 May 2022

Check out Coinhako – The platform to buy, sell and store your crypto assets. https://www.coinhako.com/affiliations/sign_up/173349_36362274

Day to Day, Reviews

Coinhako – Doufu’s First Foray into Crypto-land

Coinhako was my first foray into the crypto rabbit hole, by some twist of fate as Crypto.com had been my first choice. Regardless, I found it fortunate that I had signed up with Coinhako as it was an easier platform for beginners and had most success with my trade using that platform.

Coinhako Logo on Coinhako Blog

What is Coinhako?

Coinhako is a wallet and crypto exchange based in Singapore, co-founded by Singapore entrepreneurs, Liu Yusho and Gerry Eng, in 2014. It was originally created to provide a simple and hassle-free way to access Bitcoin and over the years, they have expanded to a wide variety of cryptocurrencies.

They provide one of the most accessible platforms for retail customers to buy, sell, hold, trade and swap cryptocurrencies securely. They also offer an earn feature this year for a variety of cryptocurrencies to allow customers to maximize their crypto holdings. in addition, they allow for multi-payment solutions, like bank transfers, credit card payments and GrabPay.

Coinhako is available on web browsers, Apple App Store and Google Play store, in both Singapore and Vietnam.

How I ended using Coinhako first

My brother introduced me to the world of crypto “investment” after he recommended me to sign up for a Crypto.com account. I was unable to sign up as they had stopped all new account registrations in Singapore to comply with the local laws and regulations and their KYC (Know your customer) approval process was problematic. Not wanting to miss out any opportunities and FOMO-ing, I jumped on the crypto bandwagon with Coinhako and have been using it ever since.

What I liked

  • User friendly and easy to use interface
  • Have a crypto news section which is clean and not cluttered
  • Wide variety of cryptocurrencies available for trading
  • Hassle free fiat on/off ramp
  • Singpass KYC available
  • Monetary Authority of Singapore (MAS) regulated
  • Reward points and events to get free crypto
  • Can earn interest on your crypto (Just launched this year!)

What can be improved on

  • High trading/transaction fees at 1%
  • Unclear Earn feature requirements (i.e. Minimum amount required)
  • Limited number of coins/tokens with Send and Receive feature

Thoughts and Views

Coinhako is highly recommended for someone who is just starting out on crypto, despite the high trading fees at 1%. It is a suitable platform for someone to get a feel of things works and not that intimidating. The 1% fee, if you are comparing with Gemini’s mobile fees, don’t seems too much at all. The last I remembered, Gemini seems to be charging more if you are trading via the mobile platform.

Account creation and setting up is a breeze too. Using Singpass for KYC is a walk in the park and setting up bank transfer account is straightforward, you don’t even need to go through the extra step of getting a Xfers account. It is very straightforward and best of all, it is MAS regulated. They also have a reward system and events that give you free crypto and their latest earn feature is a much awaited addition.

Of course, they do have some areas that could be worked on. For one, there ain’t much variety of crypto that you can send and receive to/from other wallets. Most of them are only available for trading (buy and sell). On the whole, it is worth your consideration if you are just starting out on your crypto adventures.

Check out Coinhako – The platform to buy, sell and store your crypto assets. https://www.coinhako.com/affiliations/sign_up/173349_36362274

Day to Day

Crypto Noob Doufu – Primitive Beginnings

Join Doufu in his noob journey into the cryptocurrency rabbit hole. Experience the excitement, the angst, the fear, the greed and most importantly, the lessons learnt. We start off with the usual disclaimer that I am not a financial advisor nor am I giving financial advice. I am just sharing my experiences, thoughts and opinions for entertainment purposes. Always remember to DYOR (Do Your Own Research)!

In this post, part one of the “Crypto Noob Doufu” series, we look at how it all started. What I did not do back then and how I jumped on the bandwagon later. Hop on and enjoy the trip down the memory lane.

Photo by Pixabay on Pexels.com

I first heard of Bitcoin back in 2013 through an internet article. It seems to be some sort of thought experiment to me that was pretty novel and it caught my attention. Unfortunately, there wasn’t much information (at least for a beginner), and especially Bitcoin in those days was pretty much under the radar. I saw the potential in blockchain technology and wanted to be part of it, even though there wasn’t a real life use case for it – yet. The idea of using it as a replacement for fiat and as a global currency was revolutionary but I knew it wasn’t realistic and practical. That is a story for another day. Further research didn’t gather much steam and it seems that you have to own a bitcoin to get started. There wasn’t any exchange or places that I could easy get or purchase a Bitcoin and hence, in the end I gave up.

Photo by Worldspectrum on Pexels.com

Fast forward to late 2019, my brother re-introduced me to the world of crypto “investment” after recommending me to sign up for a Crypto.com account. Back then, I didn’t sign up due to some issues. First, they had stopped all new sign ups in Singapore to comply with the local laws and regulations. Second, there were problems with the KYC (Know your customer) approval process. Opportunities wait for no one and I decided not to wait. I jumped on the crypto bandwagon with Coinhako.

Coinhako Logo on Coinhako Blog

“Investment” funds started flowing into the Coinhako account in early 2020. To be honest, it was more like gambling than investment. I had not a single clue on what I am buying or doing. The first crypto asset I bought was Bitcoin (BTC), this was pretty much a no brainer. The second one, of course, Ethereum (ETH). Next stop were the altcoins, Polkadot (DOT) and Ripple XRP. I didn’t spend a lot of money, because I didn’t have much – unfortunately – hard truths. In total, I pumped in about 600 dollars in fiat throughout the whole of 2020. This portfolio bagged a 2x increase which I liquidated before the end of 2020, thanks to the volatility and fed’s money printing adventures.

Crypto.com logo from Crypto.com website

2022 was quite the opposite of 2021. I took a hiatus due to the events in the family and work. When things had settled down a little with some pocket of breathing space, it was already somewhere Q3 of 2021. The period of easy money was replaced by learning things the hard way. The highlight of the year was DYOR (Do your own research). I finally got my CDC (Crypto dot com) account running and it took quite a while to understand how the whole thing/ecosystem worked, and yes, paid quite a bit of “learning fees” in the process. It was then I realized this was different from 2020. I was more rational back then and in 2021, I totally FOMO-ed. I have fallen into the rabbit hole and I can’t get out.

Gemini Logo from Gemini Exchange website

I had also created a Gemini account in order to get my BAT (Basic Attention Token) coins from Brave browser. How it works is Brave browser will serve you advertisements (which you have to enable, it is not turned on by default), and they will pay you in their native token (BAT). You can then use these tokens to tip other content creators that you want to support. However, to cash out the value of these tokens to fiat money, you will need to accumulate a minimum amount of token and sign up and link your account either with Uphold or Gemini.

Photo by Pixabay on Pexels.com

So far, my “investment” in crypto has been in the red by at least 50%, which is no difference from my china tech stocks holdings, but it has been a learning experience which I should have learnt 10 years ago. Better late than never. Hence, the reason for this series, to share my journey, thoughts and experiences so that no one would make the same mistake as I had. Feel free to leave comments to share your thoughts and experience too.

Once again, please be reminded that these are my own opinions and are not financial advice. I am not a qualified licensed financial advisor. And I will not be liable for any damage or losses arising from usage of these information. Please do your own research. If you are interested in signing up for a crypto exchange account, you can use my referral links below.

Crypto.com
Use my referral link https://crypto.com/app/wpp4d7nqvz to sign up for Crypto.com and we both get $25 USD 🙂

Coinhako
Check out Coinhako – The platform to buy, sell and store your crypto assets. https://www.coinhako.com/affiliations/sign_up/173349_36362274

Gemini
Have you seen the Gemini app? Try it using my code and we’ll each get $10 USD of Bitcoin. https://gemini.com/share/axnymaaud