Fallout from the algo-stablecoin apocalypse. Some points:

The present situation is a turning point in crypto markets history. Many have lost a lot of funds and this is sure to attract a lot of heat towards crypto. Its comparable to Bitconnect bust, but the key difference is that Bitconnect didnt peddle itself as a stablecoin asking people to park their savings there.

1 - Luna shitshow is over. Price may hobble up and down but the schadenfreude can only last so long, pretty soon it will all die down. The magnitude of losses is not even clear right now. People buying these dips are just degenerate gambling, this is not "investing".

2 - A whole lot of dapps/websites/mobile apps collected user funds in USDC/ USDT, even via credit cards and funelled those into Anchor UST to gain interest, and then pay out users. Orion Money, Pillow Fund, GRO, Alice, StableGains etc.. these are all apps that promised to pay users 15% based on Anchor returns. All of them are under water, and higly likely they are all insolvent. The true extent of the damage remains to be assessed. It will get even worse if we find out Celsius, Nexo etc used UST for a tranche of their funds.

3 - A lot of reports/articles will come out on how crypto as a whole is unsustainable. They will try to claim all crypto projects are the same and will implode. This however couldnt be further from the truth. Even in stablecoins, some projects like Maker DAO have been running silently for years based on sound practices that have stood the test of time. The DAI stablecoin is always over collateralised to a great extent, just to prevent these kind of runs. Unfortunately in the bull run, loud noise was appreciated more than a silent system that just does what its supposed to do. People like Do Kwon were turned into heroes, while those building DAI silently got little to no attention. Expect the tide to completely shift now that unsustainable ponzis will no longer be in vogue.

4 - Regulatory scrutiny will increase and accelerate. Most cryptos will be booboo stuff for a long time (months maybe even a year or so).

5 - High APY in stablecoins is just not sustainable. So many people went from Crypto.com to Anchor after CDC slashed their interest rates. In retrospect, they went out of the frying pan straight into the fire. There is an important lesson here. Higher rates are always a result of higher risk, and your entire capital is can be lost in a matter of days.

6 - Biggest winner of this shitshow is Ethereum and projects on Ethereum. Example. L2 scaling is already live, developing fast and most of sustainable defi is being built on Ethereum+L2s, and going to scale for millions of users with very low fees in the next couple of years. What exists on other chains is just copycat projects and forks of existing Ethereum projects that the market will soon realize is a poor copycat product because of both lack of network security + availability of a better option on L2s.