Hello legends, hope you all are well and enjoying the market volatility. As you may know, recently Do Kwon, the founder of Terra Luna, pleaded guilty.
Back in 2018, Do Kwon and his team at Terraform Labs introduced something new: an “algorithmic stablecoin” called TerraUSD (UST). Unlike other stablecoins that keep a $1 peg with real cash reserves, UST relied on its sister token, Luna, and a clever mint-and-burn system.
The idea was simple: you could always swap 1 UST for $1 worth of Luna. If UST went above $1, people would mint more and sell it; if it dropped below $1, they could burn it for Luna. In theory, this market balancing kept UST at $1 without needing actual dollars in the bank.
Do Kwon became the face of the project as Luna’s price exploded to $119 by early 2022. UST was one of the top stablecoins, and the Anchor Protocol, promising nearly 20% returns on UST deposits, attracted tens of billions. Kwon brushed off critics who called it unsustainable, claiming the yield was just a marketing strategy.
But cracks showed early. In 2022, the Luna Foundation Guard (LFG) started stockpiling Bitcoin as a safety net,
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