Nature has taught us that nothing can grow forever.
Here’s an example.
In the interest of preservation, forest conservationists spend their careers planning and plotting ways in which they can burn the very thing they seek to protect. A forest and its keepers are a perfect example of harmony.
Sometimes you have to give a little to take a little and vice versa.
By strategically burning down small sections of forest, health is restored to the ecosystem. Dead leaves, debris, and old trees are cleared for new life to take form. Burned parcels in checkerboard patterns prevent new fires from spreading to unwanted areas. The benefits are scientifically proven to keep dangerous wildfires to a minimum.
Small, planned fires prevent much larger unplanned disasters.
Clearly, we have not learned this lesson in markets.
Since the 2017 bull market, life has flourished in the crypto space. DeFi blossomed, NFTs grew like weeds, yield attracted farmers, gamification brought color, and Web3 set the landscape. Our forest was beautiful and promising, with all parts inextricably woven together.
As is the nature of, well, nature, our forest continued to grow taller, wider, and thicker. It went far beyond our control. Caught up in the awe of our creation, we never stopped to consider the implications for longevity. What appeared perfect was actually vulnerable to catastrophe.
Sure enough, our forest has been set ablaze. Regardless of where you are standing, you can feel the heat, smell the smoke, and see the flames. We are completely surrounded by danger in every direction.
If nature could speak, it would tell us one thing - we forgot to protect the thing we love.
We never learn.
To some extent, a lot of this could have been prevented. As much as we wanted to keep growing, we forgot that a little bit of fire is actually our friend. But since we ignored nature, it took its most corrective and devastating course. Now we have to accept the fact that devastating fires will be a natural part of our foreseeable future.
If there’s one thing our forest has taught us is that algorithmic stablecoins, high yield, and leverage, probably should have had their own controlled burns a long time ago. By neglecting boundaries, we completely lost sight of longevity and nature has decided to punish us for it.
The good news is that not everything will burn to the ground and no fire burns forever. The areas that we should have controlled will become painfully obvious moving forward. What doesn’t burn grows stronger, and what does burn, makes us stronger.
This certainly won’t be the last time our forest is set ablaze, but it may be the last very serious disaster for a while.
If we put this fire out and learn, we are unstoppable.