🚨 $40 Billion Lost in a Day. Fortunes Wiped Out. Trust Shattered.
Here’s the untold story of one of the most shocking events in crypto history.
👇 Let’s Break It Down:
1️⃣ A Top Project with Big Promises 🌐
Terra (LUNA) aimed to revolutionize payments with its algorithmic stablecoin UST, a bold alternative to traditional stablecoins like USDT and USDC.
But bold doesn’t always mean stable…
2️⃣ The Algorithm That Sparked a Death Spiral 🌀
UST maintained its $1 peg through a complex relationship with LUNA:
🔄 1 UST = $1 worth of LUNA (burned to mint).
When the system came under stress, the mechanism designed to stabilize UST became the cause of its collapse.
3️⃣ Anchor’s Unsustainable 20% Yield 📉
Anchor, a key platform in Terra’s ecosystem, offered nearly 20% annual yield on UST. Over 70% of UST’s supply was locked in Anchor.
When doubts arose, mass withdrawals created a cascade of panic.
4️⃣ The Collapse Began 💣
💔 UST lost its $1 peg.
💔 LUNA supply exploded from 350M to 6.5T tokens.
💔 Prices plummeted: LUNA went from $80 to $0.0001 in days.
Billions vanished overnight. Exchanges delisted LUNA and UST due to their extreme volatility.
5️⃣ The Founder’s Downfall 🕵️♂️
Do Kwon, Terra’s vocal founder, shifted from defiance to damage control.
🚩 Despite public denials, investigations revealed he controlled key mechanisms behind the collapse.
6️⃣ Arrest & Aftermath ⚖️
After months on the run, Do Kwon was detained in Montenegro in March 2023 for using a forged passport.
Global authorities charged him with fraud, market manipulation, and misleading investors.
7️⃣ Lessons Every Crypto Investor Must Learn 📚
🔎 Research Before Investing – Algorithmic stablecoins come with huge risks.
💸 Never Risk More Than You Can Afford to Lose.
⚠️ Volatility Can Destroy Even the Biggest Projects.
🛑 This Collapse Changed Crypto Forever.
It sparked global scrutiny of stablecoins, DeFi projects, and the need for stronger investor protections.
Stay Informed. Stay Smart. Protect Your Investments.
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