Black Friday in the cryptocurrency world, a thunderbolt in the cryptocurrency world!
Tragedy of the century in the cryptocurrency world! $40 billion in wealth was wiped out!
The value of the LUNA coin suddenly plummeted, and its market value shrank from $41 billion to almost zero.
LUNA is the platform token of the Terra blockchain platform, used for the issuance of the stablecoin UST. UST is a so-called algorithmic stablecoin that works with LUNA to maintain a price of $1 using a set of on-chain minting and destruction mechanisms. In theory, this mechanism ensures that traders can always exchange $1 worth of UST for $1 worth of LUNA. However, since the price of LUNA is not stable, this mechanism is difficult to implement in practice.
In May 2022, the stablecoin UST on the Terra blockchain platform was decoupled from the US dollar, triggering a crisis of confidence and an avalanche effect. This led to a large number of LUNA coins being minted, triggering panic in the market, and the price of LUNA coins began to fall all the way. Many investors suffered huge losses in this incident. The South Korean authorities are also urgently investigating the matter and have charged Terra platform employees with suspected embezzlement of public funds.
