UST Luna - The Biggest COLLAPSE in Crypto History

Bankless

Technology, Tech News, News

4.7 • 1.2K Ratings

🗓️ 12 May 2022

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

We’re currently watching one of the the largest events in Crypto history.

The sketchy outlook in the markets has triggered a run on the UST stablecoin, which began destabilizing in the last several weeks.

As time progressed, the peg worsened, and it eventually rolled over into a complete crash of both the value of UST, and the native asset LUNA.

What led to the crash? Was it a coordinated attack, or an inevitable collapse?

What Red Flags were there ahead of time? What’s the fallout from all of this? What lessons can we learn?

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Topics Covered:

0:00 Intro
6:30 Explaining the Terra Ecosystem
9:30 Tail Risk and Background
13:50 Bitcoin, Curve, and Monsters
17:54 The Initial Destabilization
20:14 The Panic Begins
24:40 The Charts
27:18 A Total Collapse
32:30 Regulators Get Involved
35:08 Was This An Attack?
37:58 The Collateral Damage
40:00 Do Kwon’s Big Talk
41:52 Rick Sanchez and Basis Cash
44:08 Community Response
46:05 How Do We Move On?
49:14 Don’t Take Shortcuts

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Resources:

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Transcript

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0:00.0	Bankless Nation, this is a special episode from us because we are witnessing something historic right now in crypto.
0:05.6	We are witnessing the largest event, I think, in crypto history.
0:10.2	This is the collapse of an entire stablecoin.
0:15.6	David, where are we going in this episode?
0:17.9	Yeah, so what's going on is there was about $50 billion of total capital destruction out of the Luna ecosystem,
0:25.3	the collapse of the largest algorithmic stablecoin ever.
0:28.0	The largest collapse of a stablecoin ever.
0:31.1	And so we are basically watching this unfold as we speak.
0:35.3	I don't think there's ever been a crypto event, a bad event, this large in crypto history, I would say.
0:41.8	And so we're going to run through, we're going to speedrun through what happened,
0:45.9	the timeline of events that have unfold to where we are now as we are currently dealing with this.
0:52.0	For the people new to this channel who don't know about the Terra Luna ecosystem,
0:56.3	we'll also explain at a high level how the whole thing works and how it came to a point where
1:01.1	$50 billion was lost between the two tokens.
1:05.0	A lot of people have lost a lot of money as a result of this.
1:08.6	Many were using the stablecoin out of the Terra ecosystem as a safe haven for assets.
1:13.3	Going into the bear market ever since January, crypto assets have been going down, down, down.
1:17.3	So people have been using the stablecoin as a flight to safety and they've been getting yield
1:22.4	using the stablecoin yields in this application called anchor, which holds a very, very prominent
1:27.1	role in this whole entire story. In addition to people using USD, the stablecoin out of Terra
1:33.1	as just a place to get yield, there were also a significant amount of funds that were getting
1:37.2	gaining leverage, getting leverage yield on this. Many were overexposed. Many have lost a significant
	...

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