The Rise and Fall of Terra (LUNA): A Crypto Tragedy
In a shocking twist, Terra (LUNA) soared to an all-time high of $119 in April 2022 but collapsed to nearly $0.00001 by May 2022, wiping out $60 billion in market value.
🚀 LUNA’s Rise
1️⃣ The Vision: Created by Do Kwon, Terra aimed to revolutionize payments with algorithmic stablecoins.
2️⃣ Peak Success: By 2022, LUNA reached $119, joining the top 10 cryptos.
3️⃣ DeFi Adoption: Terra’s ecosystem attracted billions in Total Value Locked (TVL).
💥 The Crash
🔻 UST Depegging: TerraUSD (UST) lost its $1 peg due to massive withdrawals.
🔻 Death Spiral: To save UST, excess LUNA flooded the market, causing hyperinflation.
🔻 Market Panic: Investors lost billions within days.
🌟 Aftermath
1️⃣ LUNC Creation: Terra forked into Terra Classic (LUNC) and Terra 2.0.
2️⃣ Community Efforts: Token burns and rebuilding efforts continue for LUNC.
3️⃣ Lessons Learned: The collapse highlighted the risks of algorithmic stablecoins.
📊 Quick Stats
ATH (LUNA): $119
Lowest Price: $0.00001
Market Loss: Over $60 billion
🔮 Key Takeaways
🔥 Algorithmic Risks: UST showed the fragility of algorithmic stablecoins.
🔥 Diversification: Avoid overexposure to single assets.
🔥 Collateral Matters: Stablecoins like USDC and DAI gained trust post-collapse.