Lessons to learn from this year's bloodbath

So many crypto lenders offered yields that were too good to be true. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ Market Activity Total Market Cap $811.81B (+0,24%) 24 Hour Volume $30.01B (-21.92%) Notable Movers[(XDC) $0.02768]( (+3.52%) Notable Movers (DeFi)[(RUNE) $1.38]( (+2.73%) Bitcoin Dominance 39,98%[(+0,06%)]( Bitcoin Price[(BTC) $16,886.02 (+0.19%)]( Ethereum Price[(ETH) $1,215.15 (+0.20%)]( Cardano Price[(ADA) $0,253 (-2.00%)]( [Today’s Top Stories ] Crypto firms we lost in 2022 [Listen to the CMC 50 podcast!]( 🔥 The second episode of the CMC 50 is out! Today, Connor and Molly Jane are counting down from 43 to 37 in our rundown of 2022's biggest crypto stories. You can find us on [Apple Podcasts]( [Spotify]( and [Google Podcasts](. And you can also change the rankings of the CMC 50 by voting through our [interactive list]( 15 crypto companies we've lost in 2022]( 💸 From Terra to Three Arrows Capital, and from Voyager to Vauld, an eye-watering number of crypto firms have gone bust in the bear market. The collapse of LUNA and UST created a brutal domino effect as contagion spread through the industry — exacerbated by a devastating second wave when FTX went under. But what are the key lessons that can be learned from this year's bloodbath? [Today’s Top Stories ] 1. Transparency with users is crucial. Wonderland's treasury chief was a convicted fraudster who had helped launch the doomed crypto exchange QuadrigaCX. But to the DeFi protocol's users, Michael Patryn was only known as "0xSifu." While pseudonyms are commonplace in the world of crypto, it can have major downsides. 2. Algorithmic stablecoins don't work. Traditional stablecoins are backed by dollars held in reserve — but in UST's case, complex algorithms aimed to keep this digital asset pegged to $1. Terra's collapse saw billions of dollars wiped from the crypto markets in a matter of days. Now, some regulators want algorithmic stablecoins banned. 3. Careful what you tweet. So many crypto CEOs have seen their past tweets come back to haunt them this year. Sam Bankman-Fried told his followers "assets were fine" on FTX when they weren't. Other executives just posted in bad taste, with Do Kwon telling one economist: "I don't debate the poor on Twitter." [Today’s Top Stories ] 4. Too much risk is a bad thing. From excessive leverage to lending funds without collateral, "risk management" wasn't a phrase that many bust crypto firms were familiar with. The likes of 3AC and Alameda Research made big bets that just didn't pay off — and now, it's their creditors who are left holding the bag. 5. Crypto firms are too interconnected. The bankruptcy of Three Arrows Capital directly led to the demise of Voyager, and FTX's implosion dragged down BlockFi too. So many crypto businesses held funds on the world's second-largest exchange — capital that they may never get back. 6. Skyhigh interest rates were too good to be true. Double-digit yields for investors who staked altcoins were common before the crypto lending sector collapsed. One firm that went bust — Freeway — was offering returns of up to 43%. As the old saying goes: "If you don't understand the yield, then you are the yield." 7. Holding crypto on an exchange can be a risky move. If withdrawals are suddenly frozen, users end up having little control over what happens to their savings. As 2022 progressed, we've seen growing interest in self-custody — with more and more investors learning about how to store their crypto in cold wallets. [Today’s Top Stories ] 8. It's a tough time to be a Bitcoin miner. Large swaths of the industry have been hit by a double whammy of plummeting BTC prices and rising energy costs. And some have had no choice but to sell off their Bitcoin reserves, piling further selling pressure onto an already vulnerable market. 9. Skepticism is crucial. Sam Bankman-Fried had won round politicians, regulators and consumers as he built his FTX empire into the world's second-largest exchange. But now, it's being alleged that funds were misused from the start. As an investor, it's crucial to take everything (and everyone) in the crypto sector with a big pinch of salt. 10. All this carnage could make the crypto industry stronger. We've seen a number of bad actors exit the sector this year — and now, regulation is becoming a bigger priority. This could help protect customers, and the businesses that manage to weather the bear market may achieve newfound credibility and trust in the years to come. Thanks for reading! Have a great day — more news tomorrow! [Facebook]( [Twitter]( [Instagram]( [Telegram]( Written by Molly Zuckerman and Connor Sephton Was this email forwarded to you? [Sign up here](. WANT MORE CRYPTO BITES? [Sign up here]( for Daily Newsletters, Promotions and Events and Prices [ADVERTISE]( | [CAREERS]( | [FAQ]( © 2022 CoinMarketCap [Unsubscribe]( [coinmarketcap.com]( CoinMarketCap OpCo LLC, 8 The Green, STE 6703, Dover, Delaware 19901, United States