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As the Terra ecosystem collapses into its final, irreversible stages, evidence of the real-world devastation caused by the defective virtual endeavour becomes impossible to ignore. Former LUNA backers are claiming massive losses, misery, and hopelessness on social media and message boards. Secondhand accounts indicate a spike in suicide attempts and suicides.

It's a sobering time for those of us who follow cryptocurrency. I've spent a lot of time over the last two years attempting to point out the absurdities in the booming crypto market (including anticipating luna's collapse), but I'm still surprised at how vulnerable citizens were to one of the industry's most experimental ventures. To be clear, the crypto sector is still very much in the experimental stage.

In one sense, the magnitude of the loss is obvious: it is total.

The Terra environment has entered a "death spiral" due to hyperinflation. This repercussion was baked into the network's ostensibly stabilizing process, and LUNA will continue to approach zero asymptotically. The price of the UST algorithmic stablecoin, which is currently 18 cents instead of a dollar, will also fall to zero. Do Kwon's "rehabilitation plan," which he released this morning, is an offensive joke. This wipes out nearly $68 billion in LUNA and UST's total paper worth at the end of last week. Exchanges continue to encourage token trade, a decision fraught with ethical ambiguity.

Individual losses are more difficult to comprehend in terms of scale and intensity. Cut LUNA/overall UST's supply cap in half to account for internal ecosystem project holdings, and suppose outside investors had an average of $20,000 in UST or LUNA before the fall as a thought experiment. When you divide $34 billion by $20,000, you get 1.7 million people who lost money that 99.9% of people on the planet would consider life-changing.

Many people bought LUNA below the May 12 price peak, thus those weren't all actual bucks. However, paper losses may be severe, and many people lost actual money, especially those who bought apparently "solid" UST in order to farm the system's massively subsidized Anchor lending protocol's 20% yield.

All week, there have been symptoms of deep and widespread anguish. Matthew Graham, a crypto VC known for his online accessibility, says he's received a flood of despondent comments from those caught up in the system's disastrous unraveling. Apparently, police have been called to secure Terra founder Do Kwon's residence in South Korea, where he has been threatened by irate investors.

People planning or doing self-harm are the most disturbing reports. One former LUNA supporter, going by the handle @terranaut3, claimed to know of at least eight people who have committed suicide in the days since the release in a now-deleted tweet. Suicide and attempted suicide reports, links to mental health hotlines, and dismal reports of financial immolation abound in the Terra subreddit. The most of that was written before the forum was locked two days ago, when LUNA was still worth hundreds of times its present value. These tales haven't been authenticated by CoinDesk, but they all look believable.

Here to assist

Although I am not a counselor, there is one essential fact for anyone in this situation: declaring bankruptcy is a lot better option than killing yourself. This is especially true in the United States, where bankruptcy regulations in some states may protect you from losing your home or car.

Crypto washouts are nothing new, but these accounts of disgruntled LUNA investors are unique in one way: a large number of "normies" appear to have been duped into purchasing UST and LUNA. For the majority of my tenure in crypto, the majority of the funds came from people who were actively involved with crypto principles or technology, or from investors and traders with high risk appetites.

The crypto mania of 2020-2021 was far larger and had a lot wider retail reach, hence the repercussions will be fundamentally different from the 2018 crypto bubble's collapse. In reaction, we should expect a flurry of regulatory scrutiny, but crypto insiders should also consider whether their actions have put retail speculators at unnecessary danger.

Crypto fund manager Mike Novogratz, who publicly exhibited a large LUNA tattoo in January and declared himself "officially a Lunatic," is one of the most prominent instances here. Reports have now surfaced that Novo's fund had actually abandoned LUNA by March, but if he ever did, it didn't garner anywhere near the traction that his bullish flag-waving had. From the outside, that appears to be pump-and-dump behavior, albeit in spirit rather than substance.

I also expect to see a lot more humility, critical thinking, and serious openness to other viewpoints emerge from this mess. About 17,000 CoinDesk users saw my April 22 essay sketching the scenario for LUNA's failure that finally played out before the death spiral began at the start of the week. That's why I'm here: if even a few dozen of those readers took action to safeguard themselves before the failure occurred – if even one reader did – that's what I'm here for. Remember: We're here to help the next time you see critics and skeptics dismissed as FUDders, attacked, and rejected. Let us.

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