thats not a disaster thats a greedy scam investor.

LUNA - The Biggest Crypto Disaster in History 📉
$40 Billion Lost in Just One Day
The untold story of the collapse of Terra (LUNA) 🧵

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The Terra (LUNA) collapse has become one of the most catastrophic failures in the history of cryptocurrency. Let's break down how the algorithmic stablecoin model failed, the series of events that led to the disaster, and what crypto investors can learn from it.

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Terra aimed to revolutionize payments with its algorithmic stablecoin, UST. Unlike traditional stablecoins like USDT, which are backed by reserves, UST was supposed to maintain its $1 peg through a relationship with Terra’s native token, LUNA.

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The concept was simple: users could always exchange 1 UST for $1 worth of LUNA. LUNA was burned to mint UST and stabilize its value. But, as we soon learned, this mechanism had critical vulnerabilities. When stress hit the system, it turned into a death spiral.

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4/14
In May 2022, UST started to lose its $1 peg after major withdrawals from Anchor, a DeFi platform crucial to Terra's ecosystem. Anchor offered up to 20% annual yield on UST deposits, attracting over 70% of the UST supply.

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5/14
When users began to doubt the sustainability of Anchor’s high yields, they rushed to withdraw their funds, creating massive selling pressure on UST. As UST fell below $1, the system minted more LUNA to restore the peg. This flooded the market, causing LUNA’s price to collapse.

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6/14
The crisis escalated quickly. UST lost its peg entirely, plummeting to as low as $0.10. Meanwhile, LUNA’s supply exploded from around 350 million tokens to over 6.5 trillion in a failed attempt to stabilize UST. LUNA’s price plummeted from $80 to nearly $0.0001 in just days.

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7/14
As the collapse unfolded, all eyes turned to Do Kwon, the confident founder of Terra. Known for his bold claims and defiance of critics, his tone shifted from arrogant confidence to desperate damage control as the project crumbled.

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next part in my profile!