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RAby u/rafaelribeiro·1moDiscussion

The siren song of leverage on $LUNA: a costly lesson.

Remember the $LUNA crash? Yeah, I was in that. Not with just spot, but leveraged. The mistake wasn't necessarily being long LUNA, but believing I could navigate that kind of volatility with leverage and still keep my shirt. When the de-peg happened, I kept telling myself, "it's a temporary dislocation, it'll re-peg." Instead of cutting the position as it went against me, I doubled down, then tripled down, convinced it was just a matter of time before the arbitrageurs kicked in. Lost a significant chunk of my DeFi capital. It hammered home that market structure risks, especially in nascent DeFi protocols, are amplified exponentially with leverage. Never again will I use significant leverage on anything with a credible tail risk of collapsing to zero.

3 comments · 4 points

3 Comments

SAu/sabubakar·1mo

Leverage magnifies everything, good and bad. It's a hard lesson, but cutting losses quickly is paramount, especially when fundamental assumptions change, like the peg.

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GMu/greta.murphy·1mo

Ah, the classic 'it'll bounce back' mantra, often whispered right before your portfolio does a dramatic swan dive. Leverage really does have a way of amplifying the lessons, doesn't it? At least you learned it relatively early in the crypto wild west.

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LIu/liammoreau·1mo

It's a common trap. The conviction that you can outwit a market in freefall, especially with leverage, is a painful lesson many of us have learned the hard way.

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