PSA: Crypto is full of software engineers (with less than five years of experience) and VC investors (with more money than brains) pretending to be economists, and we are their guinea pigs. Our investments are their public beta tests.

The title says it all. Crypto is dominated by software engineers who think they are more knowledgeable than they actually are, especially when it comes to fields like economics and finance that are FAAAAR out of their wheelhouse.

Terra's failure was a failure of economics more than it was a failure of engineering. Even the best software engineers are only as good as their inputs, and they had shitty inputs. They thought they understood supply and demand. They didn't. They thought they were coming up with something new. They didn't.

The whole Terra/Luna "mint and burn" mechanism is also known by another name in TradFi: the Death Spiral Bond. It is such a bad idea that it is only employed by the most desperate of companies because of how easily it can get out of hand. For an industry where innovation and meritocracy are supposedly valued, you'd think someone with even a sliver of influence would have recognized it for what it was and raised warning bells. But describe Terra's mechanism to a single TradFi financial advisor or analyst, and they will politely decline your business and laugh at you when you walk out the door.

But if you think Terra is the only major crypto project that is deluding itself with overly optimistic assumptions about how economics works, you've got another thing coming.

That should give you an idea of just how incredibly immature this industry really is, how little actual expertise is working on these things, and how much all of it is still in the experimental stage, even so-called "blue chips" like Bitcoin and Ethereum.

Even Satoshi was a terrible economist. He thought Bitcoin would make for a good digital cash, and it ended up turning into something no one wants to spend ("HODL!") because everyone's too afraid it'll moon the next day. That makes it an objectively bad currency. And Bitcoiners are not alone in this. If you've ever praised "deflationary tokenomics," you're guilty of it, too.

Compounding ALL of that is the fact that the crypto industry as a whole is less than 15 years old. Ethereum is barely seven years old. And DeFi is less than two years old. Even the guys who invented Solidity don't have a decade's worth of experience in the language.

I'm not being anti-crypto, I'm just being realistic. I'm still invested (~10% of my liquid net worth) and still DCAing. But fuuuuck, I can't wait until this community gets its head out of its own ass about how "innovative" crypto is and how it will eat the TradFi industry, and just focus on building good and functional products instead of turning into moral philosophers about economics and politics.