The collapse of LUNA, the "Moutai" of the cryptocurrency circle: a virtual financial nightmare
In the world of digital currency, a currency called LUNA was once known as the "Moutai of the cryptocurrency circle", with a market value of more than $43 billion. However, in just a few days, its value was almost zero, and it shockingly withdrew from the market. What happened?
The story starts in 2018, when a Korean student proposed a new digital currency, LUNA, and designed a stable currency UST anchored to the US dollar. His idea was novel and the rules were unique: one UST was equal to $1, but to obtain UST, LUNA had to be exchanged.
The genius did not stop there. He even founded a bank, claiming that depositing UST would earn a high interest rate of 20%. In the current poor economic environment, this promise is undoubtedly like a beacon, attracting the attention of countless investors. People want to hold UST, which pushes up the price of LUNA.
As more and more people pour in, the price of LUNA rises. From less than $1 at the beginning of 2021, it has soared to $120 in April 2022. UST has also become a leader among stablecoins and has been dubbed the "Moutai of the coin circle".
However, behind this seemingly beautiful financial feast, there are huge risks. The high interest of 20% does not come from any actual investment income, but relies on the funds of new investors to maintain. Once this fragile balance is broken, the entire system will collapse instantly.
Unfortunately, this day has finally come. When investors began to realize this potential crisis and withdrew their funds, the price of LUNA was like a bursting dam, and it plummeted. On May 10, 2022, nearly $6 billion of funds were withdrawn from LUNA, causing its price to plummet by more than 90% in a single day to $10. 免废近🐍qu；+v（Txm276382） Although some people still have illusions and try to buy at the bottom, the situation is irreversible.
In the following days, the price of LUNA continued to plummet until it almost returned to zero. Many exchanges had to close LUNA trading and delist it. This feast of virtual currency ended up as a nightmare.
Looking back now, the collapse of LUNA was foreshadowed. It was like a well-designed Ponzi scheme, using the temptation of high returns to attract countless investors.However, economic operation has its inherent laws. Any castle built on the beach will eventually be destroyed by the waves.
For billionaires, the collapse of LUNA may be just an ordinary investment failure. But for thousands of small investors, they may have lost everything in pursuit of the dream of wealth that seems within reach. How they wish that time could stay forever on the day before the collapse of LUNA, but that is ultimately just an unattainable dream.
