🕳 Cryptocurrency Archaeology｜LUNA Crash: $40 Billion, A Week to Zero Illusion

May 2022

Not a spike, not a pullback,

but a systemic interrogation of the entire crypto world.

LUNA / UST crash,

recognized as——

the most thorough collapse of faith in cryptocurrency history.

🧩 What is LUNA? How glorious was it back then?

🔹 LUNA: The core token of the Terra ecosystem

🔹 UST: Algorithmic stablecoin, pegged to $1

🔹 Mechanism slogan: No need for dollar reserves, can stabilize 1:1

📈 Peak moment:

LUNA market cap ~ $40 billion

UST became

👉 The third largest stablecoin in the market

Anchor Protocol

👉 20% annualized "risk-free return"

📌 The consensus at that time was:

"This is the ultimate form of stablecoins."

🔥 How did the crash happen?

1️⃣ Stablecoins began to "depeg"

Large funds withdrew from Anchor

UST fell below $1

2️⃣ Death spiral initiated

UST drops → Minting LUNA to stabilize

LUNA surges → Price plummets

Plummets → More LUNA needed

👉 Infinite inflation + Confidence collapse

3️⃣ Market panic amplifier

Arbitrageurs frantically sell off

Retail investors frantically flee

Algorithm fails in the face of panic

📉 The result is only one:

UST collapsed, LUNA infinite issuance, price went to zero.

💣 How brutal is the data?

LUNA from $80+ → $0.0000…

Total ecosystem market cap

👉 Over $40 billion evaporated

Millions of investors

👉 Cleared overnight

Countless families, funds, institutions

👉 Suffered devastating blows

📌 This is not a "pullback" but a complete disappearance.

🧠 Four bloody lessons left by LUNA

① High returns must correspond to high risks

20% stable return

Essentially "supports old money with new money"

② Algorithms cannot fight human nature

Model validity ≠ Confidence validity

Once confidence collapses

👉 No matter how perfect the algorithm, it becomes worthless

③ The essence of stablecoins is "credit"

Without real collateral

It can only rely on consensus to hold on

④ Do not treat "systemic risk" as a low probability

Black swans are not accidents

But a settlement day that will come sooner or later

🕯 A note to future generations

312 is leverage liquidation

519 is bubble burst,

LUNA is a mechanism-level collapse.

It is not defeated by the market,

but by the arrogance of "nothing can go wrong."

🕳 This article is dedicated to remembering LUNA.$BTC $ETH #ETH走势分析 #加密市场观察