đ¨ $40 Billion Lost in a Day. Fortunes Wiped Out. Trust Shattered.
Hereâs the untold story of one of the most shocking events in crypto history.
đ Letâs Break It Down:
1ď¸âŁ A Top Project with Big Promises đ
Terra (LUNA) aimed to revolutionize payments with its algorithmic stablecoin UST, a bold alternative to traditional stablecoins like USDT and USDC.
But bold doesnât always mean stableâŚ
2ď¸âŁ The Algorithm That Sparked a Death Spiral đ
UST maintained its $1 peg through a complex relationship with LUNA:
đ 1 UST = $1 worth of LUNA (burned to mint).
When the system came under stress, the mechanism designed to stabilize UST became the cause of its collapse.
3ď¸âŁ Anchorâs Unsustainable 20% Yield đ
Anchor, a key platform in Terraâs ecosystem, offered nearly 20% annual yield on UST. Over 70% of USTâs supply was locked in Anchor.
When doubts arose, mass withdrawals created a cascade of panic.
4ď¸âŁ The Collapse Began đŁ
đ UST lost its $1 peg.
đ LUNA supply exploded from 350M to 6.5T tokens.
đ Prices plummeted: LUNA went from $80 to $0.0001 in days.
Billions vanished overnight. Exchanges delisted LUNA and UST due to their extreme volatility.
5ď¸âŁ The Founderâs Downfall đľď¸ââď¸
Do Kwon, Terraâs vocal founder, shifted from defiance to damage control.
đŠ Despite public denials, investigations revealed he controlled key mechanisms behind the collapse.
6ď¸âŁ Arrest & Aftermath âď¸
After months on the run, Do Kwon was detained in Montenegro in March 2023 for using a forged passport.
Global authorities charged him with fraud, market manipulation, and misleading investors.
7ď¸âŁ Lessons Every Crypto Investor Must Learn đ
đ Research Before Investing â Algorithmic stablecoins come with huge risks.
đ¸ Never Risk More Than You Can Afford to Lose.
â ď¸ Volatility Can Destroy Even the Biggest Projects.
đ This Collapse Changed Crypto Forever.
It sparked global scrutiny of stablecoins, DeFi projects, and the need for stronger investor protections.
Stay Informed. Stay Smart. Protect Your Investments.
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