LUNA Crash Event
UST and LUNA are pegged: when LUNA is destroyed and prices spiral up, the system will issue more LUNA to buy UST to stabilize the market. The result is a price crash, forming a death spiral, both collapsing to zero. When confidence collapses, they both crash together.
Event Timeline
UST Decollateralization, Death Spiral Begins
Terra's algorithmic stablecoin UST lost its 1:1 peg with the dollar, causing market panic, and LUNA began to be sold off in large quantities.
LUNA Plummets, Oversupply Uncontrolled
To maintain the peg with UST, LUNA was issued in an unlimited manner by the system, causing the price to plummet from $80 to almost zero, forming a classic case of 'death spiral'.
Terra Chain Paused, Community Self-Help
Terra's blockchain was temporarily paused, and the development team and community tried to self-rescue, but confidence was difficult to recover.
LUNA 2.0 Hard Fork Launched, Original LUNA Renamed LUNC
Terra community passed a governance proposal to launch LUNA 2.0 (now LUNA), renaming the original LUNA as LUNC. LUNC became a community hype object, and the ecological reconstruction of LUNA 2.0 progressed slowly.
Current Situation of LUNC and LUNA 2.0
LUNC price has been low for a long time, with occasional community speculation; the number of projects in the LUNA 2.0 ecosystem is limited, and mainstream funds and developers' attention has decreased.