When bad news is good news
Twitter: @4lex_4sh4w
Twitter: @4lex_4sh4w
The Terra Rebels’ implosion was a long time coming, and the price of discovery ($125–150k on a $900m blockchain) was an excellent deal for the wider LUNC community. Net/net, it’s actually a very positive development for LUNC. TR’s dysfunction had become a running joke among “senior” TR’s as far back as early August, and was reflected in 1) a TR civil war in mid-August, and 2) the endless parade of key people who quit TR since then.
I think every TR-quitter quit for basically the same reason. TR, over time, turned from a forum of honest debate into a political party dedicated to flaming anyone who didn’t kowtow to the grifting trinity which gained control of TR: Vegas, a cohort of pseudo-technical Vegas sycophants, and TR’s hyperpolitical, hypercontrolling, agenda-driven core Discord moderators, led by ClanMudhorn. (Not coincidentally, these are the main profiteers of the 900M-LUNC dine-and-dash that just happened.)
The fact that this ‘core 12’ group sold out TR’s credibility, remaining dev bench, and ability to execute for ~$11k pieces of silver (each), illustrated that the only “community” they ever cared about was themselves. But it actually lays bare a reality that’s been obvious to some time: TR doesn’t actually do much.
TR’s only singular achievement post-8/26 were the 1.2% tax, which traded a tiny amount of off-chain Binance burns for breakage of all on-chain smart contracts and near-total loss of on-chain liquidity to CEXs with much lower taxes, like MEXC and Binance (whose referral links Vegas’s Luna Classic Community touted endlessly, likely for referral fees, as liquidity fled the LUNC chain). TR’s 1.2% burn tax was thus mostly repealed 4 weeks later. [1]
After the 1.2% repeal, TR quickly took a back seat, at best, to the main technical milestones of post-8/26 LUNC: the Dragonberry security fix (Gadikian / Notional Labs) and the re-enablement of IBCs (Gadikian, Ed, Fragwuerdig, and Zaradar). TR vehemently opposed the only scalable LUNC burn mechanism ever proposed (the USTN proposal) and the only viable attempt to delegate authority to LUNC technical contributors without making TR the chain’s gatekeeper (the multisig proposal).
All this is to say, good riddance. As the Terra Rebels no longer have any L1 developers, the chain should replace TR with a new canonical repo ASAP. Jacob Gadikian proposed a novel github repo administration system that sounds cool, as a normie I wonder what the decentralization-to-admin-overhead tradeoff is there?
What needs to change: Education
LUNC’s summer hypergrowth season was driven by a group of meme magicians touting the burn narrative. This disorganized marketing shtick was more successful than anyone imagined, but its “1+1=3” simplicity brought in a huge number of very poorly-educated users (probably over 200k unique users at peak). Many of these users were clearly very new to crypto and didn’t understand basic things, like
the difference between on-chain blockchain participation vs. trading on a CEX
how a “1+1=3” solution (the 1.2% tax) was a guaranteed fail
how, even if some watered-down form of off-chain burn was implemented by CEXs willing to throw us money, it would be far less than the amount of chain utility destroyed
With these users came many YouTube influencers, whose business economics revolves around one thing: telling users what they want to hear with little margin of error allowed.
Crypto and DeFi are extremely complicated, even for so-called experts. The early days of TR felt like being one of 1–2k people who’d survived a plane crash and were trying to fix the plane in the middle of the desert — and then 250,000 tribesmen showed up from all over the world, including some very smart people, but mostly convinced that one really bad idea was somehow going to fix everyone’s problems.
For TR’s more crypto-familiar technical contributors, an urgent question surfaced: who — how — is going to tell them that the 1.2% tax is a horrible idea? Most took a tone of respectful disagreement, but as is common with devs, they weren’t interested in picking a fight; they wanted to do the best job they could with a specific request, and declined to engage a community that clearly needed education.
This well-intentioned decision, IMO, sowed the seeds of future disappointment, infighting, and failure. Concessions to that narrative quickly begat more concessions to the chain’s influencers, chief among them Vegas, and the perpetuation of clickbaity shortcuts over technically viable ideas. Influencers who consistently prioritize self-serving / clickbait political narratives over facts are a long-term threat to the community, and should be called out at every opportunity.
There’s plenty of room for honest disagreement about things and there’s plenty of room for well-intentioned people to have views that are both high conviction and incorrect. But people with significant community followings who repeatedly ignore technical reality in favor of selfish narratives don’t help the community get any closer to what it currently needs: a common vision and functional decentralization.
This is a very common problem in crypto btw: devs don’t have the time and patience to educate people who are much more ignorant than they are. In the short run, it turns the coredevs into the equivalent of high priests, making the community more and more dependent on them (which devs like, as it feeds their egos and reduces the work needed to get the community to vote things in). In the long run, it guarantees disaster. This is where influencers need to step in, but clickbait economics (telling the audience what it wants to hear regardless of how true it is) seems to win out over technical reality every single time.
LUNC devs/contributors who want a healthy level of communication need to be much more aggressive on this subject going forward.
What the community needs: Common purpose + functional decentralization
As LUNC attracted a tsunami of new users in the summer/fall, it showcased a big downside of diversity / decentralization: nobody was able to agree on anything outside of reactivating LUNC staking/governance. For the community to work together, it needs
a common goal/vision: a clear idea of where it’s going, what makes it different, and why the place where it’s going will make everyone in the chain richer / happier / etc. I felt like in the initial days of Terra Rebels, that common goal was simple: restore governance, fix/resurrect UST in better form. Solution: no idea.
functional decentralization / delegation of authority: Running every single micro-spending decision through a 14-day election process is a fucking nightmare for the technical contributors the community needs. It’s made worse by a prevalent “everyone is an expert” phenomenon, where the proposer(s) will get 10 idiotic criticisms and 5–10 genuinely deranged criticisms for every intelligent one. There’s a point at which decentralization breaks down into anarcho-communism and we are way past it. Solution: create some kind of multisig-based Senate of technical experts who have argued a lot in the past, (have proven that they can keep one another honest) to manage the community pool. Hold them to a high standard of community disclosure (which means they have to spend a significant amount of time administering it, thus admin costs will not be low). Pay out at least 50% of contracted funds upon completion as judged by the multisig peers, not when work is contracted.
Until these problems are solved, LUNC will remain in PvP purgatory, a bunch of rats fighting over a steadily depreciating community pool.
P.S. Kill the religious fixation on Binance and “Binance burns”
I maintain that it’s only a matter of time before Binance ends support for burns, unless drastic changes to the current terms are made which guarantee that Binance will gain share at other CEXs’ expense. Not because TR/Vegas fragged themselves, or because the .1% / .9% became .5% / .5% (both are probably relevant, but not the most important thing).
The Binance off-chain burns will end because they did not help Binance gain market share.
And that’s also probably for the best.
The only business rationale for Binance to do what it did ($1–3m of burn-charity to the LUNC chain per month) was for customer acquisition: gaining market share of LUNC trading from other CEXs. This share, which stood at 70%+ when the announcement has made, has collapsed since then, per LiveCoinWatch:
My guess is that Binance has burned around 20 billion out of 6.9 trillion LUNC tokens since then. That isn’t nothing, but it’s irrelevant to the chain’s future.
Smart crypto investors care about 3 things basically: active users, decentralization, and dapp development (which total value locked or TVL is shorthand for).
Every blockchain is a network of computers that talks to each other. Unfortunately, given the extremely immature state of dapp development, the world has tens of thousands of smart-contract L1 blockchains that have basically nothing to say to each other, outside of Ethereum. Securing development momentum is a priority.
What do dapp developers need? They need low, stable tax rates that don’t unpredictably mess up their apps, and don’t swing wildly depending on which political factions are winning or losing that week’s blockchain Game of Thrones episode. They need credible yet functional decentralization, because some degree of real decentralization is why we’re all here, and if you have fake decentralization, you might as well use AWS and forget about blockchains.
What about users? What attracts users? Low tax rates and things to do on-chain (dapps).
Every single L1 evolution should be neutral or net-positive for users, dapp devs, and decentralization.
A Binance $1M/month subsidy of an $800m-$1.5B chain (at most 1%/year of market cap) is worthless compared to gaining share in the above criteria. This was a spontaneous monster that emerged from the mud like one of Saruman’s orcs in Lord of the Rings and has been allowed to turn into mental pollution infecting a huge percentage of the community.
If Binance starts demanding big new concessions to keep it in place, LUNC should say “thank you for your service,” and walk away.
Big Binance-specific concessions in the service of an empty narrative will be counterproductive to LUNC utility, will cause burden dapp devs with unintended consequences, will create more bad incentives for more bad economic policies later, will look shady, and will signal extreme unseriousness to potential external investors in the chain, who know that such narratives are pointless in the long run.
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[warning: politics ahead; leaving them here for educational context for newer arrivals to the LUNC chain, not because any of it matters going forward]
[1] After the failure of the burn tax, Vegas twisted TR into shilling Neblio, an unknown, VC-owned shitcoin, thus amplifying a grift Vegas had already been selling to his own followers (that “CZ supported Neblio” and was an investor in Neblio, therefore getting his followers to pile into it). Binance was eventually alerted to this by a group of disaffected former Vegas moderators, and sent an email to several TR leaders (probably Ed, Mudhorn, Vegas and Raider) basically ordering TR and Vegas to STFU and stop mentioning Binance or CZ’s name, or expect legal and media action (the ‘cease-and-desist’).
Ed, ever the stoic servant-leader, was left to clean up the mess alone in TR’s secured channels as Vegas and Raider ghosted.
The fact that Binance’s email to TR explicitly called out Vegas’s scam marketing tactics wasn’t enough for Vegas to take responsibility; supposedly Vegas had voted against the Neblio proposal internally, but the corrupt “admin majority” of TR had supported it, suggesting an impressive level of collusion between Vegas and Mudhorn’s crew going back months.
Anyway, Ed left TR very shortly after this fiasco.
By 2 weeks ago, TR’s disinformation had become impossible to keep up with. TR touted their involvement in fixing IBCs, but when the IBC fix short-circuited due to a conflicting TFL update, Raider ghosted again, blaming “Ed and an outside organization” (Gadikian’s Notional Labs and/or TFL) and disclaimed any involvement, even though Zaradar had been significantly involved.
While TR told the community that their ‘40 full time employees including 25 core devs’ held up the sky, only 1 of the Terra Rebels GitHub’s 4 administrators (seniormost developers with the authority to merge a pull request into the core code) was actually from TR (Zaradar). The others were Jacob Gadikian, Ed, and Ed’s IRL colleague Marco.