Where were you during the Cryptogeddon of 2022?

Where were you during the Cryptogeddon of 2022?

Technology
May 20, 2022 by
8
Is the reign of Terra / Luna over? Welcome back to cryptoland and its been a wild, wild last week. My first question: where were you during the Cryptogeddon of 2022? In case you were asleep or too focussed on the Johnny-Amber court videos, I am here to tell you about the Cryptogeddon of 2022. Thee was the Otherside
Where were you during the Cryptogeddon of 2022?

Is the reign of Terra / Luna over?

Welcome back to cryptoland and its been a wild, wild last week.

My first question: where were you during the Cryptogeddon of 2022?

In case you were asleep or too focussed on the Johnny-Amber court videos, I am here to tell you about the Cryptogeddon of 2022.

Thee was the Otherside drop, people raving over Mega Kodas, then the 3 and 4 digit ENS, and of course the Elon-Twitter episode that never seems to end.

But frankly, nothing will beat the demise of Terra / Luna and how it literally fell from the sky in shambles.

This will probably go down in history so buckle up.

I pray that none of you are embroiled in it but it still behooves you to know a little of what is going on.

So what happened?

TerraUSD (UST) is a stablecoin pegged to USD, but not backed by USD.

There is a difference.

A stablecoin is essentially a digital cryptocurrency that is always equals to $1 USD.

It makes transferring funds and certain kinds of transactions much safer, easier when you know that the value of that cryptocurrency is always going to be a fixed, stable value.

At its peak, UST was worth $18B and was the top 5 largest stablecoins in the world.

Allegedly, some say there was a coordinated “attack” on UST to try “break the peg”.

Whether that is true, we leave it to the on-chain sleuths and internet CSIs to tell us in time, but for now, it worked.

UST was depegged and its value plummeted.

Luna is a sister token that is used to balance and maintain the peg of UST.

The exact tokenomics is a little more complicated but just know that Luna exists to ensure UST is always pegged to $1.

The famous words of Jon Wu:

“In other words, UST is stabilized by:

Contracts.
The gigantic gravity well created by the size of Do Kwon’s nuts.”

Do Kwon, Founder of Terra / Luna

When the “attack” happened, it triggered a cascade of people losing confidence in UST and they started selling frantically after watching UST dip below $1.

Even more people withdrew from Anchor Protocol, which was giving an absurd 20% interest rate.

Fear spreads faster than the speed of light.

More than 50% of all funds in Anchor exited in 48 hours.

To bring UST back up to $1, they had to burn UST for Luna and sell it on the open market.

What happens when there is a sudden and massive spike in supply while demand stays the same?

The price of Luna goes down down down, real quick.

Luna lost 99.9% of its value in a single week.

In some exchanges, Luna was priced with so many zeros, they just regarded it as “$0.00”.

So in just a few days, the ecosystem of UST and Luna has been decimated.

The UST stablecoin isn’t worth a dollar anymore ($0.28) and Luna is now at $0.00029.

I will rift more on this, some conspiracies swirling, what can we learn and what’s next for Crypto in the next few posts.

Stay tuned.

Were you affected by the recent UST/Luna crash?

#startups #business #startupx #growth #success #socialmedia #culture #entrepreneurship #strategy #dokwon #luna #terra #terraformlabs #stablecoin #lunacrash #cryptoland #ust #cryptogeddon #bitcoin

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Where were you during the Cryptogeddon of 2022? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

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