Why are crypto companies collapsing left and right? 🤔

in #cryptocurrency2 years ago

What do you think is responsible for the recently incessant collapse of crypto companies and projects?

What started with Terra Luna (LUNA) and their stablecoin, UST quickly spread to Celsius, CoinFlex, Three Arrows Capital (3AC), Blockfi, Voyager, Robin Hood, etc.

Why is everyone going under water and what would you advise surviving projects and companies do going forward to avoid similar things happening to them in the next bear market.

For me, the two major problems these projects have are:

  1. Poor risk management practices. From unsecured loans to excessive leverage.

  2. Unsustainable reward system. Trying to out-compete themselves by paying unsustainable interest and rewards to users.

What other reason(s) can you come up with for the market-wide collapse going on?

Sort:  

This is a one-time notice from SCHOOL OF MINNOWS, a free value added service on steem.
Getting started on steem can be super hard on these social platforms 😪 but luckily there is some communities that help support the little guy 😊, you might like school of minnows, we join forces with lots of other small accounts to help each other grow!
Finally a good curation trail that helps its users achieve rapid growth, its fun on a bun! check it out. https://plu.sh/altlan/