🌕 How LUNA Crashed: A Lesson Worth a Billion
In 2022, LUNA was a star — one of the top altcoins, the Terra ecosystem, the stable UST, huge support.
Everyone believed. Some — too much.
What went wrong?
— UST was an algorithmic stablecoin.
— Its “stability” relied on its connection to LUNA.
— When the demand for UST fell, a chain reaction began:
→ UST loses its peg
→ LUNA starts to be printed in crazy volumes
→ The price of LUNA drops to zero
→ The entire system collapses
The result?
— $60+ billion in market capitalization — turned to dust
— Investors are in shock
— Do Kwon (the creator) is on the run
— SEC and regulators suddenly woke up
— A crypto winter began
Conclusion:
Algo-stablecoins look good on paper. But if there are no reserves and protection against panic — expect trouble.
LUNA became the crypto-Icarus — soared to the moon and burned up.
