May 9, 2022, is regarded as the beginning of the end of Terra’s $LUNA and its stablecoin (lol) $UST.
They say a picture is worth a thousand words. The charts below show what happened a year ago:
TerraUSD ($UST)
LUNA ($LUNA)
10 Horrifyingly Amazing Facts about Terra’s and UST’s Collapse
- The Speedy Descent: Terra’s collapse was alarmingly swift, with UST’s value plummeting within mere weeks, shocking the crypto community and leaving many in disbelief.
- A $30+ Billion Nightmare: At its peak, Terra’s market cap exceeded $1 billion, making its eventual collapse a colossal financial catastrophe for countless investors. FTX may get all the news, but Terra’s collapse was waaaaaaay worse.
- A Seismic Shift: Prior to the collapse, Terra had a top-10 spot among cryptocurrencies. Its rapid descent sent shockwaves through the market and led to a reordering of the crypto hierarchy.
- Doomed DeFi Projects: The collapse didn’t just affect Terra and UST. Multiple DeFi projects built on the Terra ecosystem were dragged down with it, leaving devastation in their wake.
- The Peg That Broke: UST’s inability to maintain its peg to the US dollar was a central horror in this tale, as its stability had been a cornerstone of Terra’s ecosystem and a major selling point for investors.
- Community Fragmentation: The collapse of Terra saw its once-united community fracture into factions, with some desperately holding on to hope while others jumped ship, creating an environment of chaos and discord.
- Governance Gone Wrong: The Terra collapse highlighted the importance of effective governance in the crypto world. The struggle to coordinate efforts to save the ecosystem only accelerated its decline.
- The Impact on DeFi: Terra’s downfall sent ripples throughout the entire DeFi space, with the collapse of such a prominent project casting doubt on the stability and reliability of other DeFi projects.
- The Role of Market Turbulence: External market factors played a significant part in Terra’s demise, demonstrating the vulnerability of even well-established projects to broader economic fluctuations.
- The Resilience of Crypto: Despite the horrifying collapse of Terra and UST, the overall cryptocurrency market continued to forge ahead, reflecting the resilience and adaptability of the space in the face of adversity.