Two years ago today, Terra’s LUNA cryptocurrency experienced one of the most catastrophic collapses in crypto market history, plummeting 99.999% in value. In early May 2022, LUNA's price was around $100, but by May 15, it had fallen to less than $0.002. This dramatic drop resulted in losses exceeding $7 billion for investors.🌟🌟

The collapse was triggered by the failure of Terra’s algorithmic stablecoin, US Terra (UST), which was meant to be stabilized by LUNA’s liquidity. However, the model proved untenable as UST lacked backing and was highly volatile.🧧

When UST lost 40% of its value, LUNA’s price crashed irreparably. Some traders capitalized on the fluctuations, but many investors lost substantial amounts, including life savings.

Terra’s founder, Do Kwon, fled and was a fugitive until his arrest at an international airport in Montenegro. Both South Korea and the United States sought his extradition for financial crimes, with South Korea eventually securing his extradition.

Do Kwon's attempt to salvage the project by launching another cryptocurrency also named LUNA failed, leaving both tokens, LUNA and LUNC, largely worthless.

This event underscored the inherent risks in the altcoin market, highlighting the importance of cautious investment strategies. It was soon followed by another major scandal involving the FTX exchange, emphasizing the volatility and potential for fraud within the crypto industry.♦️♦️