šØ $40 Billion Lost in a Day. Fortunes Wiped Out. Trust Shattered.
Hereās the untold story of one of the most shocking events in crypto history.
š Letās Break It Down:
1ļøā£ A Top Project with Big Promises š
Terra (LUNA) aimed to revolutionize payments with its algorithmic stablecoin UST, a bold alternative to traditional stablecoins like USDT and USDC.
But bold doesnāt always mean stableā¦
2ļøā£ The Algorithm That Sparked a Death Spiral š
UST maintained its $1 peg through a complex relationship with LUNA:
š 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.
3ļøā£ Anchorās Unsustainable 20% Yield š
Anchor, a key platform in Terraās ecosystem, offered nearly 20% annual yield on UST. Over 70% of USTās supply was locked in Anchor.
When doubts arose, mass withdrawals created a cascade of panic.
4ļøā£ The Collapse Began š£
š UST lost its $1 peg.
š LUNA supply exploded from 350M to 6.5T tokens.
š Prices plummeted: LUNA went from $80 to $0.0001 in days.
Billions vanished overnight. Exchanges delisted LUNA and UST due to their extreme volatility.
5ļøā£ The Founderās Downfall šµļøāāļø
Do Kwon, Terraās vocal founder, shifted from defiance to damage control.
š© Despite public denials, investigations revealed he controlled key mechanisms behind the collapse.
6ļøā£ Arrest & Aftermath āļø
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.
7ļøā£ Lessons Every Crypto Investor Must Learn š
š Research Before Investing ā Algorithmic stablecoins come with huge risks.
šø Never Risk More Than You Can Afford to Lose.
ā ļø Volatility Can Destroy Even the Biggest Projects.
š 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.
š Follow @Coinaute, ā¤ļø Like, Comment, and ā”ļø Share this post!
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