DeFiHistory

💸 The Terra Luna Collapse: $60 Billion Lost in the Greatest DeFi Crash

In May 2022, the crypto world witnessed one of the most catastrophic failures in decentralized finance (DeFi) history — the collapse of the Terra ecosystem, including its stablecoin UST and governance token LUNA.

🔁 UST was designed to maintain a 1:1 peg with the U.S. dollar through an algorithmic mechanism tied to LUNA. But when market conditions triggered a death spiral, the peg broke — and over $60 billion in value was wiped out within days.

📉 LUNA crashed from over $100 to less than a cent. Investors, including major institutions, were blindsided. Thousands lost their life savings.

⚖️ Terra founder Do Kwon faced international investigations and arrest warrants, as the event triggered global regulatory crackdowns on stablecoins and DeFi projects.

⚠️ The Terra crash became a turning point in crypto history — a brutal reminder of how innovation without risk controls can end in disaster.

🏷️ #TerraLuna
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