I like your comment:
That being said, I didn't expect it would go this badly this quickly, and my thinking was that the people developing this stuff understood it a lot better than me and wouldn't do it if it was really that risky. I was clearly wrong on that point.
I think some very smart people, (some), who are very successful in one area, may believe they will be equally competent in other areas without the prerequisite years of experience those areas require. Other times they over depend on their own reasoning and ideas and ignore the history of what they are trying to do, and why others failed.
You were wise to stay away from something you didn't think made financial sense, most of those situations seem to end badly in cryptocurrency.