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That in itself wouldn't be that bad. At least you have a recovery process. It should also be possible to checkpoint the database to a backup periodically and then you only have to replay since the checkpoint.

This is far more ideal.

I don't see a problem here. Why would I lose application database?

Yeah, I don't see the problem either. You got to be very sloppy to lose the entire database especially without backup checkpoints.

It happens or what is more likely to happen is corruption where you have to rebuild from source.

Yes. @smooth has right. This is what I had on mine mind. You can always restore the backup.