I believe that for most people, 2022 was not a great year, and I am no exception. If I were to summarize my 2022 with one keyword, it would be "calm." Calm is relative, as I started the year with restlessness, carrying dissatisfaction and hope as I returned from Shanghai to Chengdu. At that time, the cryptocurrency market was still in a bullish state, and I was still immersed in Zhu Su's "SuperCircle" theory, fantasizing about making quick money. Fortunately, my financial knowledge made me aware that the market would fluctuate with the second interest rate hike by the Federal Reserve. This allowed me to consciously control my positions. However, even with my cautious trading, I still suffered losses this year. When the bubble burst and the waters calmed, my heart also became calm. I have witnessed the bloodthirstiness of capital, the foolish epidemic prevention system, and various incidents within the corrupt system. This has only strengthened my belief that decentralization, permissionless, modularization, and interoperability are the elegant qualities that technology should possess. I don't trust people, I trust code.
Three Memorable Events in the Industry#
Terra's Collapse
May was my darkest moment. Terra's collapse caught me off guard. I had high hopes for the Terra ecosystem and had made many investments. The sudden turn of events left my assets close to zero. Fortunately, as a gambler, I didn't exit the market. I managed to recover some of my losses through short-term trading and unintentionally bought some coins at a relatively low price that may have future value. I still believe in the Terra ecosystem. Luna has lost the trust of users and investors, making it difficult for it to recover. However, with the migration of Terra projects to Cosmos, I see a glimmer of hope for rebirth. Some projects within the Terra ecosystem are building their own chains and becoming Layer 1, which presents them with even greater challenges and opens up new ambitions.
Lessons from Terra: I didn't research reverse arbitrage and didn't have sufficient risk management. A certain institution simulated what to do after UST unpegging months before the collapse and not only exited the market but also made a profit.
Sanctions on Tornado Cash
In August, Tornado Cash developer Alexey Pertsev was arrested and imprisoned, and founder Roman Semenov's GitHub account was disabled. Tornado Cash's GitHub repository has been deleted.
Alexey is similar to Assange, one helps evade regulation, the other helps expose the truth, both of which are intolerable to those in power. Since the sanctions were imposed, the protocol's weekly deposit and withdrawal volumes have decreased by over 90%. Currently, Tornado Cash is at a crossroads. Should they continue development despite the legal risks or temporarily "lie low"? This is the choice facing the Tornado Cash community.
But as a right-wing person, I truly hope they succeed. Fortunately, Tornado is decentralized, and community members have started to rescue the project. They have announced a new roadmap and will continue development, but developers will still face severe uncertainty due to sanctions and legal issues. Regardless of the final outcome, I will continue to pay attention and hope that these freedom fighters can defeat the dragon.
FTX's Collapse
In December, the most unfortunate person was undoubtedly SBF. His strategies worked during the bull market, but the funding gap became apparent during the bear market. However, CZ did play a trick on SBF, causing significant losses for us bystanders.
I have never been fond of VC chains because many VCs are greedy, and VC chain users do not expect them to have high loyalty. I bought SOL a long time ago, made some profits, and then left. Misappropriating user funds is a big taboo. A person I know, Teng, encountered Kang Bin. In 2020, Teng invested over 10 million yuan, intending to buy ETH mining machines, but the funds were misappropriated for quant trading. The profits were far less than the appreciation of ETH, and in the end, Teng couldn't repay the debt and was persuaded to invest in FIL mining machines. In the end, Teng lost everything.
Lessons from the FTX incident: Do not misappropriate user funds, make financial statements transparent, and choose the right people.
Cosmos#
I got involved with Cosmos at the beginning of the year and was deeply attracted to it. The theory of a Hayekian society and the organic growth of the ecosystem fascinated me. I also understood the advanced consensus of "governing without doing." Atom is just one part of the Cosmos ecosystem, and Cosmos' unique architecture will give rise to projects that surpass Atom, something not seen in other Layer 1 ecosystems.
Cosmos is inclusive and open, with a group of talented developers, a growing community, and capital gradually entering the scene. The current state of the ecosystem is similar to Ethereum's ecosystem in 2018. I believe there will be significant developments in the next few years. Atom's price will never reach the heights of ETH, but the overall scale of the Cosmos ecosystem surpassing ETH is not a dream.
Outlook for 2023#
Cryptocurrencies have a strong reflexivity. We believe, we build, we spread, and our actions also influence the development of the plot. Choose what you firmly believe in, learn, build, and spread.
The keyword for 2023 is "recovery." The rebound of the market next year does not look optimistic at the moment. Fortunately, I can calmly do things now. Running a Cosmos node is an important product, although it doesn't bring the expected high returns. However, it can bring me reputation and capital. I will also strategically invest in the Cosmos ecosystem with a long-term mindset.
ZKP mining is also a field I'm interested in because it can integrate with existing resources. However, ZK currently gives me the feeling of being overvalued, and many projects claiming to have ZK remind me of the AI bubble in 2016.
In 2023, I will exercise more, communicate more with family, and remember that life is not just about crypto.