Disclaimer: This article is for informational purposes only. And my opinions are based on my experience in the crypto and finance space. Always do your own research before you make any financial decision.
The last two years have been tough in the finance industry. Failures in banking, FinTechs and some crypto projects. All of the things that happened dropped some things in my mind that I think you can learn from, no matter how little.
I heard the phrase "no system is too big to fail" from one of my clients years back I did not take it seriously until I witness the failures of my projects and institutions.
The Lessons
1. There is no institution or project that is too big to fail.
Read that again, do not be deceived. Factors that cause failures in some projects are not internal. While some projects are self-destructive some fail based on external policies. There is no utopia anywhere and there is no project that is 100% safe yet. A bad algorithm, errors in the protocol, hacks, and bad policies can end any project.
No matter how you believe in something ensure you have a backup.
2. It may happen overnight.
You may not have enough time to secure your funds when it is happening. A lot of people lost millions in the last few years because of situations like this and no matter how we think we are safe, more may still happen in the future. True DAOs are better but anything that has the hand of humans cannot be trusted 100% because the best of humans have an atom of greed in them.
3. CEX are here for the money. Don’t trust them
Any money you have in an exchange is not in your wallet. They have control over the funds and can suspend trade, withdraw, and lock your assets. Centralized exchanges are 50% Banks and can mess with your funds during a crisis. Poloniex once held my 150 SBD when SBD was $8 and they released it back to me when it was $1.2. That is CEX.
4. Trust coins that have survived a crisis.
The majority of the assets in the Market have not experienced any crisis. Assets that suffered a crisis and still thrive should be considered for long time investment.
5. Regulation is not bad
It is hard to regulate what you cannot control, but there should be some quality control for crypto assets. Anyone can copy and paste a token contract, deploy their token and start selling. There should be a little regulation for quality control. I consider this a good regulation.
Our finance is connected to our health. Stay safe in this market.
I am tykee, I do dev things and write.