The Rise and Fall of LUNA & UST (Terra Crash)

Terra was a crypto project with two main tokens:

LUNA (governance token)

UST (a “stablecoin” meant to always equal $1)

💥 What Happened?

In May 2022:

UST lost its $1 peg (it fell below $1).

To fix it, billions of LUNA were printed.

But it failed — both tokens collapsed to nearly $0 within days.

🟥 Over $45 billion in market value was wiped out.

👨‍⚖️ Fallout:

Investors lost life savings.

Terra’s founder Do Kwon became a fugitive.

Authorities from multiple countries started investigations.

🌍 Impact:

Shook global confidence in “algorithmic stablecoins.”

Caused a chain reaction of bankruptcies in other crypto firms.

Regulators began cracking down on crypto more seriously.