The biggest crypto crash: Terra (UST/LUNA), May 2022

Shock reminder: the “stablecoin” UST loses its peg to $... and LUNA (top 10 at the time) goes from >100 $ to (almost) zero in a few days. Dozens of billions $ have evaporated and the domino effect shook the entire market.

Why did it break?

• Algorithmic model without real collateral → death spiral after the depeg.

• Chain liquidations, lack of liquidity, panic.

Lessons for today

• No “risk-free” yield: check collateral, governance, audits.

• Leverage amplifies everything: manage exposure and counterparties.

• Diversify assets and platforms.

• Have an exit plan (stops, position sizes, alert thresholds).

📌 Historical marker: on March 12, 2020 (“Black Thursday”), BTC dropped by ~40% in 24 hours. Extreme volatility is part of the game — risk management is too.

👉 And you, what rules do you apply to navigate the next market stress test?