What does 'Cryptocurrency Moutai' refer to?

'Cryptocurrency Moutai' refers to LUNA, a virtual currency that has garnered significant attention in the cryptocurrency market. The name LUNA comes from the Terraform Labs company behind it, which developed the UST coin, an algorithmic stablecoin designed to ensure a 1:1 peg to the US dollar. To maintain this value peg, LUNA is used as collateral for UST; whenever UST is minted or burned, the amount of LUNA will increase or decrease accordingly, forming a bi-directional minting and burning relationship.

The price of LUNA has experienced extreme volatility. In 2021, its price soared from less than $1 to a peak of $119.5, with a market capitalization reaching $41 billion, earning it the nickname 'Cryptocurrency Moutai.' However, due to flaws in its underlying algorithmic stability mechanism, LUNA experienced a significant decline in 2022, with its price dropping from nearly $90 to almost zero, resulting in a market value evaporating by several billion dollars.

The collapse of LUNA was primarily due to flaws in its algorithmic stability mechanism, which lacked actual asset support and had a weak ability to withstand price fluctuations caused by market speculation. Although the system designed an arbitrage mechanism to maintain the price stability of UST, this mechanism proved inadequate during extreme market volatility.