How This Man Just Caused a $45 BILLION Crash [Terra Luna]

A video on YouTube. In Tech, a Krater category.

Summary by Krater

This video examines the 2022 collapse of Terra Labs, explaining how its algorithmic stablecoin UST and its companion token LUNA lost 45 billion dollars in value and discussing the mechanics, warning signs, and possible coordinated attacks behind the crash.

From the video

Answers: What caused the Terra Luna crypto crash?

Terra Labs crypto crash
algorithmic stablecoins
UST and LUNA decoupling
Do Kwon and Terra ecosystem
crypto contagion and market panic

What it concludes

Terra Labs designed an algorithmic stablecoin UST pegged to one US dollar, backed by a stabilizing mechanism using LUNA to absorb volatility.
A 20% fixed deposit yield attracted rapid capital influx, but made the system extra vulnerable to mass withdrawals.
Do Kwon dissolved Terraform Labs on April 30, 2022, just days before the crash.
On May 9, 2022, the 1-dollar peg for UST began to fail, triggering massive withdrawals and a death spiral that wiped out 45 billion dollars in market capitalization.
Leaked on-chain data suggests large actors executed a coordinated attack by dumping massive amounts of UST at the moment of highest vulnerability.
The collapse of Terra Labs became one of the largest crypto failures in history, serving as a cautionary tale of counterparty risk in decentralized finance.

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