The idea of the “family” culture that so many businesses push for is seeping deeper into the crypto world as communities are formed on a sometimes toxic, cultish stance to unwaveringly back the projects they are invested in.
Don’t get me wrong, some parts of the crypto community are great — I’m a part of a few communities myself — but when it’s misused, it can lead to the blind leading the blind. Sometimes off a cliff.
Last month, Do Kwon, the founder of Terraform Labs (TFL) — the organization behind the now-dead algorithmic stablecoin TerraUSD (UST) and cryptocurrency Terra (LUNA) — pushed for patience and support from his community of “LUNAtics” as the team rushed to create Terra 2.0.
Even when the Terra/LUNA situation was unfolding and imploding, the “LUNAtic” community surrounding the comatose project supported the cause, ignoring the risks other investors highlighted. Some LUNAtics are still supporting the relaunched LUNA 2.0, even after everything that happened to the original project.
Of course, that wasn’t the only time a crypto project pushed for the hands that supported their endeavors to prop them up once again.
Confirmation bias galore
Whenever you’re involved in a disruptive space, it can feel lonely when the mainstream world doesn’t understand or care about it, so people will often band together to support one another, Matt Hougan, chief investment officer at Bitwise Asset Management, told TechCrunch.
“There’s a tremendous amount of confirmation bias in this space,” Mike Alfred, a board member at Eaglebrook Advisors and Iris Energy, said. “That confirmation bias leads people to attack others who raise issues that would have saved them money, because they would rather continue to support the decisions they’ve already made rather than examine what people from outside [the community] say to be careful.”
While “community” is an open-ended concept that can be used to support a lot of things — from cryptocurrency to founders to a project — a significant amount of value is automatically placed on a project when it has a huge following.