Coin story: the week $LUNA taught crypto what an algorithmic stablecoin really is.
In early April 2022, $LUNA traded near $119. Its sister token $UST was sold as a $1 stablecoin kept in line by code and a fat Anchor yield, not by cash in a bank. The Terra ecosystem was worth tens of billions on paper.
On May 7, large UST withdrawals from Anchor started a run. By May 9, UST lost the dollar peg. Holders burned UST for LUNA, and LUNA supply exploded into the trillions. In roughly 36 hours LUNA fell from around $60 toward pennies. By May 12–13 the chain was halted and both tokens were near zero. Elliptic later put investor losses around $42 billion.
The lesson I still use: a yield that looks too good usually is, and a "stable" coin that needs endless new demand to stay pegged is a bet, not a savings account.
$LUNA $UST #Terra #CryptoHistory #Stablecoins #CryptoLesson
NFA / Not financial advice
In early April 2022, $LUNA traded near $119. Its sister token $UST was sold as a $1 stablecoin kept in line by code and a fat Anchor yield, not by cash in a bank. The Terra ecosystem was worth tens of billions on paper.
On May 7, large UST withdrawals from Anchor started a run. By May 9, UST lost the dollar peg. Holders burned UST for LUNA, and LUNA supply exploded into the trillions. In roughly 36 hours LUNA fell from around $60 toward pennies. By May 12–13 the chain was halted and both tokens were near zero. Elliptic later put investor losses around $42 billion.
The lesson I still use: a yield that looks too good usually is, and a "stable" coin that needs endless new demand to stay pegged is a bet, not a savings account.
$LUNA $UST #Terra #CryptoHistory #Stablecoins #CryptoLesson
NFA / Not financial advice
