Trying to explain the entire 2022 contagion through a flow chart

The entire 2022 starting from LUNA collapse to recent FTX collapse including the liquidity crunch at Genesis and Grayscale has been summarised in this flowchart. It's a bit complex, but it gives the complete picture about what happened.

Flowchart image link: https://imgur.com/a/Ifrh3rc

Going to add some explanation here so that you can better understand what happened. Look at the flowchart along with comments to get a complete idea.

1. Leverage originated from Genesis
2. 3AC + other hedge funds were famous for putting on the derivatives trade to harvest the premium
3. DCG needed to balance ETF vs UIT, as being the largest ETF sponsor would be bigger than the 2% rake
4. Voyager Digital makes a $654m unsecured loan to 3AC and a $377m secured loan to alameda
5. BlockFi, Nexo, Celsius are responsible for terrible lending standards as well.
6. Alameda / FTX was running low float Soylana ecosystem
7. Alameda is rumored to have taken out 3AC
8. B/c of the Luna crush, their collateral would have been margin called.
9. They “save” the industry by doubling down —> stealing customer funds and digging a greater hole
10. The charade ends.

And ultimately, we’re in this mess for 3 reasons:

1. GBTC never converting and the ETF hopium. Hero trade turned into widow maker
2. The worst lending standards we have ever seen. BlockFi, Celsius, Voyager, Genesis.
3. SBF fraud plain and simple. He fucked us bad.

The main issue was too much over-leverage in the market, and lenders like BlockFi, Celcius and their likes. SBF was the final nail in the coffin.

https://nitter.net/alphaketchum/status/1593883167785615360

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Thank you.