What lessons can be learnt from Terra’s downfall?
How a culture of self-purification can promote a healthier future for Crypto and Web3.
It certainly didn’t seem that Do Kwon was too worried about Terra’s future when he started off his day on May 8th. Well his twitter post sure didn’t show that.
Reading this tweet now almost makes Do Kwon look like a comedian, considering how Terra’s native token Luna has lost a 100% of its value. But rather than dedicating this article to talk about the exact causes that led to this huge downfall, or whether or not this whole thing was a Ponzi scheme, let’s talk about some of the lessons that can be learnt from the Terra Luna crash.
The process of self-purification
Before moving on, I want to briefly talk about a natural process which occurs in natural water bodies known as self-purification. Scientific research has shown that wastes and pollutants that are discharged into rivers, lakes or seas disappear slowly with time. This process doesn’t require any external artificial control because physical, chemical, and biological mechanisms ensure that these pollutants are filtered away in a completely natural way. The water is hence purified naturally, as if the ecosystem acts upon itself to get rid of the waste.
Internet’s self-purification process
Analogously, you can see the Internet as its own kind of ecosystem where information, data, entities that could be regarded as “waste” or “pollutants” exist. It’s clear that the Internet already has its own existing set of self-purifying mechanisms. Since it is a space for open discussion and sharing of ideas, debates and healthy criticism on new web technologies can foster improvements, progress and therefore purification.
For instance, during the development of IOTA, an open-source distributed ledger and cryptocurrency designed for the Internet of things, MIT Media Lab actively pointed out flaws in its system by examining its design with scrutiny. Through the publishing of online articles, this allowed for investors and the general public to be warned and informed of such flaws. People could count on this kind of information to verify what had been falsely said by others.
Do Kwon, an authoritarian
In the case of Terra, numerous economic experts have already criticized and pointed out some major flaws in the system. Had these voices been heard, they would have helped the project correct and improve itself. Unfortunately, Do Kwon lacked humility to listen to what others had to say, often dismissing this type of criticism as “retarded”, and that “silence is a perfectly acceptable option if stupid”. He used his “influencer” status and macho attitude as means to completely silence healthy criticism which would have otherwise helped Terra from collapsing utterly.
Lessons for the future
I hope this incident reminds people that healthy criticism and rigorous verification processes are crucial for the growth of Web3. Verified information should be widely spread so as to invite people to do their research before blindly investing all of their savings. Decentralizing not only how the technology is designed, but also how ideas are shared, communicated and improved upon should be the basis of Web3 culture. In my opinion, promoting these different self-purification mechanisms will allow for a more sustainable and healthy future.
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