Are you here when Luna crashed?

[YellowSwap]

This is a question for those who are in the market when Luna crashed.

A friend is warning me to becareful with stable coins because if anything happened they could be affected and he made mentioned of Luna days.

I tried thinking what happened 🤔 I couldn't remember anything.

Can someone tell me if something happened to stable coins when Luna crashed some years back?

[Jubilee58]

Luna was created by an entrepreneur called Do Kwon and luna crashed when the terra USDT was depeged and could not retain it's original value of $1 and it was found that  their was an error during the designing terra USDT which lead to it's depeg and thereby crashing the terra cryptocurrency.

This event took place in the year 2022 , and many who invested in terra Luna lost their investment massively, and till date Do Kwon  is still facing the charge levelled against him as a result of terra USDT crash.

Yes, it true that terra stable coin crashed and investors are being cautious about stable coin, however it is something very difficult to eliminate stable coin in cryptocurrency market, and even though terra USDT crashed does not mean other stable coins won't be reliable.

[leonair]

This is a question for those who are in the market when Luna crashed.

A friend is warning me to becareful with stable coins because if anything happened they could be affected and he made mentioned of Luna days.

I tried thinking what happened 🤔 I couldn't remember anything.

Can someone tell me if something happened to stable coins when Luna crashed some years back?

LUNA was able to gain a lot of investors very quickly and they were doing very well in the market. LUNA company brought their stable point UST to the market. But at one point, both LUNA and UST crashed in a day. And at that time many people made huge losses and many suicides were seen. If you google, you will know about its history very well. So I will tell you to read some articles from there you will know the issues of LUNA crash very well. A friend of mine lost a lot of money which completely destroyed him financially.

[blockman]

This is a question for those who are in the market when Luna crashed.

A friend is warning me to becareful with stable coins because if anything happened they could be affected and he made mentioned of Luna days.

I tried thinking what happened 🤔 I couldn't remember anything.

Can someone tell me if something happened to stable coins when Luna crashed some years back?

That's the UST crash. It was a hot news in the past that the Terraform Labs have been accumulating Bitcoin to back their stable coin. Many thought that it was a good idea and a stable one. But not until the UST has collapsed and the entire ecosystem of terra did. That's one of the biggest crash that has ever happened. That promising luna based on its investors was once there have changed their minds. It also served as a reminder that not all those who looked promising projects are really promising as they are.

[Mahiyammahi]

Well his concerns are valid , since luna crash we got a term that even Fiat could crash/drop or even scam. Luna had their own stable coin named UST it crashed $1 to below $0.004 which is nothing .

Since then we do knows that stable coins are not even safe. So if you're putting your all trust on stable coins that market can crash so why not convert my cryptos on Stable coin this is for you. You can google for the full history.

Here's a documation for you - https://www.sciencedirect.com/science/article/abs/pii/S1544612322007668

[Josefjix]

As other people had commented, Luna was a great blockchain based token that got crashed, investors dropped in assets and then no refunds till today, it affects the stablecoin backed by it and then nothing to right home about, it was a terrible experience that got everyone be careful about crypto and start questioning if crypto is really a game of financial playground, or something solving the problems of the masses.

Anyway, what seems questionable is what you may be going with stablecoin, if leaving USDT and USDC for others, I'll tell you to stay calm with these two stablecoin and never depart from it.

[FirmWars]

LUNA – a native token of Terra – had the 8th largest market capitalization among cryptocurrencies with nearly 40 billion USD in April 2022. The role of LUNA is to maintain the value of TerraUSD (UST), which is a stablecoin pegged to the US dollar in the Terra ecosystem. Unlike other well-known stablecoins, such as USDC and USDT, whose stability is secured with reserves of assets, a dollar peg of UST solely relies on the use of LUNA.

You friend is only trying to warn you about other stable coin not to crash just as Luna crashed, the quote above is just a snippet of what LUNA is and it's stable coin TerraUSD but you can read the full details on the topic Dissecting the Terra-LUNA crash: Evidence from the spillover effect and information flow
This article provided will help you get an information of what happened to Luna.

[X-ray]

I was there, UST depeg was caused by large withdrawals from Anchor Protocol and it spirals down and LUNA loses its value. Everyone want to get out of it and exchange it to other stables which causes crisis of liquidity. It was similar to bank run.

On the bright side, we know to avoid any non compliance stables. Circle issued stable (USDC) and tether issued stable (USDT) is the only proven stables with good track record or even better just put it in bitcoin. There is no such thing as depeg with bitcoin.

[el kaka22]

To be fair, if you are 1to1 backed in USDT or anything else like a stablecoin, then you have to worry about nothing. Even if it's de-pegged for a moment, you would have 1to1 backing in the banks and you could just pay a dollar for it and make it go back up.

What Luna had was a situation where it wasn't backed like that, so when it dropped under 1 dollar, there was no dollar to pay for it to get it back up to a dollar, and that is why it failed. I always warn people though, USDT could crash too, the moment governments seize their money, this isn't impossible and in theory a possibility and a huge vast risk in the market.

[shinratensei_]

To be fair, if you are 1to1 backed in USDT or anything else like a stablecoin, then you have to worry about nothing. Even if it's de-pegged for a moment, you would have 1to1 backing in the banks and you could just pay a dollar for it and make it go back up.

What Luna had was a situation where it wasn't backed like that, so when it dropped under 1 dollar, there was no dollar to pay for it to get it back up to a dollar, and that is why it failed. I always warn people though, USDT could crash too, the moment governments seize their money, this isn't impossible and in theory a possibility and a huge vast risk in the market.

It was algorithmic and doesn't have backing of real money. I agree with you, the peg is illusion and if it can be redeemed in the first place because backed by real money, everyone wouldn't become worried and sell whatever is left to recoup themselves from disaster hence the hyperinflation of $luna in attempt to back the UST. It is a fake stablecoin and everybody seems to have learned to not recreate the same thing, at least the founder do kwon is punished.

[programmer3666]

I was a bit new to crypto around that time, but I was around when the Luna actually crashed. Nothing really happened to all stablecoins, but it scared a lot of people back then, and I think the main issue was that USDT was not properly backed, so once things started going wrongly, it just could not hold its value and collapsed afterwards and when that happened, there was panic and so many7 people rushed to sell other stablecoins as well, even though most of them recovered later on. so the Luna crash was more of a lesson that not every stablecoin is truly stable as the name implies, some are definitely safer than others.

[asriloni]

Can someone tell me if something happened to stable coins when Luna crashed some years back?

During the luna crash. There's nothing happened with other stable coins that transparently backed by the fiat such as USDC & USDT. It's the only UST^{(Luna synthetic dollar)} that crashed so hard.

So why is it only affecting UST? The reason is Luna printed UST by backed only with their own Luna. At that time, they were trying to acquire 1b USD worth of Bitcoin to back their UST, but they get no money to funding it, then that news gets leaked. People were tanking off their Luna. Since UST was fully backed by Luna, it's going along with Luna.

The biggest downside is that they have no fiat or reserve cash to repegged their UST. They can only keep to sell Luna, then used money raised to repeg their stable token, but it's all failed. So both Luna and UST have fallen drastically.

The other stable coins who fully transparent about their reserved got no impact caused by the crash of UST & Luna crash.

[Dunamisx]

Can someone tell me if something happened to stable coins when Luna crashed some years back?

UST got crashed along as it was depegged, many don't want to remember the experience with the Luna Saga of that time, because it claimed alit of people asset and they were gone for life, while another astonishing part of the entire story was when the return of Luna was launched, then I see a number of people giving a second chance to reclaim back their lost and accepting to invest for their recovery opportunity.