đ´ $LUNA Crashes to $0 in 1 Day: A Lasting Reminder of Crypto Risks
Terra Network: Founded by Do Kwon and Daniel Shin, aimed to revolutionize payments with blockchain and stablecoin ecosystem.
đ´LUNA & UST: Became household names by 2022. UST was an algorithmic stablecoin designed to maintain a $1 peg, backed by LUNA tokens.
đ´Anchor Protocol: Promised up to 20% annual yield on UST deposits, attracting vast amounts of UST but raising sustainability concerns.
đ´May 2022 Crash: Over $2 billion worth of UST was unstaked and liquidated, causing UST to lose its peg and LUNAâs price to plummet.
đ´Market Impact: Collapse wiped out approximately $60 billion, affecting firms like Voyager, Celsius, and Three Arrows Capital.
Failed Recovery: Terraâs Luna Foundation Guard deployed billions in Bitcoin reserves to stabilize UST, but efforts failed.
Legal Issues: Do Kwon faced fraud charges and was arrested in Montenegro in March 2023.
đ´Lesson: The LUNA-UST crash highlights the risks of algorithmic stablecoins and high-yield promises, emphasizing the need for transparency, proper risk management, and regulatory oversight in the crypto industry.
Remember: Anything can happen in crypto!
