After the sudden collapse of the Terra ecosystem, the token's price plunged too far below $1 just about a month afterward. This article will discuss , "When Did Luna Crash? And Why?" Let's get started.
When Did Luna Crash?
In May 2022, the value of Luna collapsed from over $120 a coin to effectively zero, wiping out over $50bn in market capitalization of UST/LUNA and causing over $400bn in losses for the broader cryptocurrency markets.
Why Did Luna Crash?
The Luna Foundation Guard used its stocks of BTC and other resources to support UST's peg, but it wasn't enough to halt the decline of UST.
The algorithmic mechanism designed to maintain the price of UST at $1 went into overdrive. Users rushed to burn their UST in order to create LUNA tokens, which caused LUNA to hyperinflate. At the end of May, one LUNA token was almost worthless, while UST was trading for less than $0.03.
The Terra project essentially split in half after the ecosystem collapsed. One part of the community abandoned the concept of algorithmic stablecoins and launched the Terra 2.0 project. The other side of the community chose to maintain the algorithmic stablecoins and stick with the original platform. Tokens of the original platform were rebranded to Luna Classic (LUNC) and TerraClassicUSD (USTC).
When Did Luna Crash? And Why? - Hopefully, this article can help you to get some knowledge.
