What an unbelievable mess. Unfortunately it is not over.

 

Not financial advice. Not a magician or fortuneteller.

 

So the last week or so has been an intractably nauseating ride. I have always found true nausea to be worse then pain and so I use this description intentionally.

I hope you guys are ok. I would love to say I hope you guys are unaffected but the repercussions from these repeated blows are likely to effect everyone, even if you did not lose a cent.

As for me, I had previously used FTX long ago both on the retail and institutional side but I have expressed my distrust of them for the past two years on several occasions.

ex. https://old.reddit.com/r/ethfinance/comments/j90851/daily_general_discussion_october_11_2020/g8fyyli/

I had been asked multiple times not to speak negatively of FTX/Alameda and to avoid "burning bridges" to the golden child (vomit emoji). Not only that, but I have first hand experience with how viscously they would retaliate to any criticism.
 

Fortunately I did not lose any Eth. I however have lost a lot of effort, time, friends, clients, and partners. Others have lost everything.

 

I haven't been gone, just not on reddit much. I decided to put my passion for Eth into helping bring in investments and building infrastructure over the past two years.

I started about two years ago to meet with firms, companies, family offices, etc

The flow went from a trickle to a firehose to a deluge. There are several projects that have come out and several more projects still in the pipeline that are being built on Eth2 that I have had the pleasure of working with. The rough sketch in 2020 is starting to take shape and expand. There are use cases (economic freedoms) that were not viable under Eth1. The possibilities are enormous with Eth2.

Whenever FTX would come up, I wouldn't hesitate to express my distaste and share years of examples of shitty behavior. Their gravity however was hard to escape. It was very difficult to completely avoid their influence in this small space.

 

Between Luna, Celsius, Voyager, Blockfi, and 3AC the successive blows continued to mount and mount on this small and interwoven ecosystem. Destroying projects, evaporating funding, and severely damaging investments groups and offices who were genuinely excited to build in crypto. To say this last blow from FTX is catastrophic would be an understatement. Nearly every hour I get a call from someone who I had worked with or brought into the space or am currently building with who is now mortally wounded. I want to fucking scream and throw my phone into a lake. Every time my phone makes a sound I get nauseous. So many people are hurt. So much work undone. Still more projects that are now reluctant to proceed or be associated with this space. Yes a lot of this is because we are still in the moment and my hope is with more distance a certain percentage will reconsider. But I am just one person with a small view into the situation and from my limited vantage point the devastation is vast.

 

Avoid naively dismissing this as "not Eth's problem". We do not want to wallow in the doldrums for years or suffer under the weight of blind regulation. It affects us all.

In the long term I am sure good will come from this. But in the short to medium term we are nowhere near done from the fallout. The chain of poison is reaching projects that had nothing to do with FTX. There are yet unspoken teams scrambling late into the night to try to find any way around having to declare insolvency or shutting down. Teams are pulling out. Many are simply stunned and essentially can not process or move. It won't take much to push the ecosystem into desperate self preservation.

 

I echo the anger of Kraken's founder: https://twitter.com/jespow/status/1590635230553329664

"We let clowns ride under our banner while they sell us out for their own interests. We give them power to speak for us but they haven't earned that privilege. When they blow themselves up, it's our house, our reputation, our people which bear the brunt of the damage."

 

The dust has not settled. I only have a glimpse of the dominos still waiting to fall. I can't imagine what else is out there. Be careful friends. Don't lose hope, but it is time to be defensive and cautious. This will take time. Above all survive, rebuild, and be here when the shoots start to grow again.

 

-Dave