Terra

Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Due to limited liquidity, LUNA sell orders will not be accepted from 10:51 PM - 11:11 PM CT. Please submit your orders outside of this window.

On Thurs. May 25, Terraform Labs announced that the Terra community had approved the creation of a new blockchain, Luna 2.0. The creation of this new chain is a response to unprecedented volatility on the Luna 1.0 chain, which caused the price of the original LUNA and UST to collapse almost to zero. 

As part of the migration, the former asset LUNA will become Luna Classic, or LUNC. A portion of LUNA holders will be eligible to receive an airdrop of the new token (LUNA), per the terms outlined by Terraform Labs.

The new Terra blockchain will utilize the new LUNA, and will not include the UST stablecoin. 

On 9 May, after nearly 18 months of steadily holding its value against the US dollar, the so-called stablecoin TerraUSD (UST) became unpegged. The uncoupling triggered a cascade response that ultimately crashed UST and the Terra (LUNA).

TerraUSD (UST) is a stablecoin, which means it is a cryptocurrency pegged to a fiat currency. In this case, it is designed to be pegged to the US dollar. Stablecoins are intended to allow investors to hold crypto assets with less volatility, and trade a dollar equivalent without needing to cash out their positions. 

UST is considered an algorithmic stablecoin because instead of being backed by assets such as cash or cash equivalents, it is supported by on-chain code that facilitates a change in the supply and demand between UST and LUNA.

LUNA is the cryptocurrency that works in unison with UST in an effort to keep UST in 1:1 parity with the US dollar. One dollar of LUNA can always be converted at a 1:1 ratio to 1 UST. 

For example, if LUNA is trading at $10, then it can be redeemed for 10 UST, and 10 UST can be redeemed for 1 LUNA. If UST rises above its $1 peg to $1.01, then traders can swap 1 USD of LUNA for 1 UST. This trade burns 1 LUNA and mints 1 UST, which can then be sold for 1.01 USD. 

If UST rises to $1.02, then traders can sell for a 2 cent profit, and so on. 


In theory, increasing the supply of UST and lowering the supply of LUNA brings the price of UST back down until it reaches $1. Conversely, if UST drops below the $1 peg, then traders will be incentivized to buy 1 UST for 0.99 USD, which can then be swapped for 1 LUNA. 

This move burns UST and mints LUNA, sending UST higher towards the $1 peg.

UST lost its peg to the dollar starting on May 8th following large withdrawals of UST from Terra’s DeFi protocol Anchor. UST fell quickly, and struggled to regain its peg because the burning of UST and minting of LUNA couldn’t keep up. 

UST descended rapidly as the prolonged de-pegging led to uncertainty and a snowball effect of larger withdrawals. 


A significant share of circulating UST was locked on Anchor, a Terra-based lending and borrowing protocol that paid users 19.5% to stake UST. 

The LFG used up about $2.9 billion of its bitcoin reserves in an unsuccessful attempt to revive UST. 

WSJ 
Decrypt 
Bloomberg

*This content is for educational purposes and is not investment advice.

South Korea's prosecutors have reportedly obtained a court order to freeze assets worth about $104 million belonging to Terraform Labs co-founder Daniel Shin. The authorities allege that he unfairly profited from selling cryptocurrency LUNA at high prices before the token crashed. Shin has denied the allegation.

South Korea Freezes $104 Million in Assets Belonging to Terra Co-Founder

An analysis of the FTX and Alameda Research collapse has been published by the blockchain and crypto analytics firm Nansen and the report notes that the Terra stablecoin collapse, and the liquidity crunch that ensued, likely started the domino effect that led to the company's implosion.

Analysis of FTX and Alameda Collapse Points to Terra LUNA Fallout Starting the Domino Effect

Blockchain evidence shows that FTX's FTT token combined with trading losses both hid and worsened the financial condition of Sam Bankman-Fried's empire.

Terra/LUNA Stablecoin Collapse Also Killed FTX: Report

$4 billion in FTT tracked from Alameda to FTX aligns with reports of a loan—using customers funds—from the exchange to the trading desk.

FTX Catastrophe Likely Triggered By Terra Collapse: Nansen

Bitcoin

Months after the collapse of Terra's U.S. dollar-pegged token UST, the organization created to protect the once-stable coin, the Luna Foundation Guard (LFG), published an audit report audited by the New York-based consultancy company JS Held. According to the report, LFG claims to have spent 80,081 bitcoin and 49.

Terra's $2.8B Defense System — Luna Foundation Guard Audit Says Group Spent More Than 80,000 Bitcoin Defending UST Peg

Luna Foundation Guard published an audit today by JS Held showing its efforts to defend the UST peg during the May collapse. The post Luna Foundation Guard says it spent $2.8 billion to defend UST peg appeared first on The Block.

Luna Foundation Guard says it spent $2.8 billion to defend UST peg

Officials said they suspect Chai Corp. leaked customer information to Terraform Labs.

South Korean Prosecutors Raid Terra Co-Founder's Company in UST Probe

Terraform Labs founder Do Kwon dismissed similarities with the collapse of FTX.

Luna Foundation Guard Spent $2.8B Defending UST Peg, Third-Party Audit Finds

The founders of the now-defunct crypto hedge fund Three Arrows Capital (3AC) are speaking out after months of silence in the wake of the firm's bankruptcy.

Three Arrows Capital Breaks Silence, Says That FTX and Alameda Hunted Their Positions During LUNA Collapse

In a startling revelation amid the fiasco surrounding FTX, Galaxy Digital Holdings Ltd (OTC: BRPHF) revealed it has a $76.8 million exposure to the beleaguered cryptocurrency exchange, out of which $47.5 million is currently being withdrawn. It already hasn't been a great 2022 for Galaxy and its CEO Larry Mike Novogratz.

Billionaire Mike Novogratz Takes Another Hit: First Luna, Now FTX Is Costing His Crypto Firm Millions

The crypto villians discussed the impending FTX-Binance deal on the UpOnly podcast on Tuesday.

'Pharma Bro' Martin Shkreli to LUNA's Do Kwon: 'Jail Is Not That Bad'

Martin Shkreli, who became known for raising the price of a lifesaving drug by 5,000%, discussed the potential merger of the cryptocurrency exchange FTX with rival Binance Tuesday with Do Kwon, a South Korean fugitive. What Happened: “This is a depressing conversation,” Kwon said on the "UpOnlyTV" cryptocurrency podcast hosted on Twitch stream.

'Jail Isn't That Bad': Luna Collapse Fugitive Do Kwon, Ex-Con 'Pharma Bro' Shkreli Talk FTX-Binance Deal

Terraform Labs founder Do Kwon has been accused by South Korean prosecutors of allegedly instructing one of his employees to manipulate the price of Luna Classic (CRYPTO: LUNC), formerly Terra (LUNA) token. The prosecutors used messenger interactions between Kwon and his employee as evidence.

Private Communication Reveals Do Kwon Allegedly Instructs Co-Worker To Manipulate Price Of Luna Token

Crypto hedge fund Arca has shut down its Digital Yield Fund, a $20 million fund that had exposure to terraUSD.  The post Crypto hedge fund Arca shutters down TerraUSD-exposed fund appeared first on The Block.

Crypto hedge fund Arca shutters down TerraUSD-exposed fund

The fund was shuttered on Aug. 31 with around $20 million in assets under management, the CEO confirmed.

Crypto Firm Arca Closed Its Terra-Exposed Digital Yield Fund

On Thursday, Nov. 3, 2022, local reports from South Korea disclosed that Korean prosecutors have allegedly discovered evidence that shows Do Kwon and an associate manipulated the price of LUNA, Terra's native crypto token. The report further says South Korean prosecutors believe Kwon is hiding out in Europe.

Report: South Korean Prosecutors Accuse Do Kwon of Manipulating LUNA's Market Price

Following the Terra stablecoin collapse last May, the Terra blockchain ecosystem has another stablecoin concept in the works called “Solid.” The stablecoin Solid and its white paper were revealed by a decentralized finance (defi) project, Capapult Finance, and the idea has been dubbed a “soft-pegged stablecoin” built on Terra.

Following the Great UST Collapse, a Defi Project Plans to Launch a ‘Soft-Pegged Stablecoin' Built on Terra

According to a report, the embattled crypto lender Hodlnaut saw a significant loss from the Terra blockchain collapse last May. The report notes that Hodlnaut downplayed the company's exposure to the Terra ecosystem and allegedly lost $190 million from the incident.

Report: Deleted Files Indicate Crypto Lender Hodlnaut's Execs Gave Little Weight to Terra Luna Exposure

A Singapore-based court is set to hear a lawsuit filed by over 350 international investors against the co-founder of embattled Terraform Labs Do Kwon. The investors claim to have lost about $57 million due to the collapse of the Terra blockchain and the subsequent crash of its native token Luna.

Terra Co-Founder Do Kwon Faces $57M Lawsuit From International Investors

Beleaguered cryptocurrency lender Hodlnaut had downplayed its exposure to the Terra ecosystem and its sister token Luna (CRYPTO: LUNC) created by fugitive Do Kwon in the run-up to and after its crash and had suffered a nearly $190 million loss as it collapsed, according to the findings of an interim judicial managers' report. “It appears that the directors had downplayed the extent of the group's exposure to Terra/Luna both during the period leading up to and following the Terra/Luna collapse in May 2022,” the report states, according to Bloomberg.

Crypto Lender Hodlnaut First Downplayed Exposure To Terra Luna, Now Confirms A $190M Loss In Crash

A judicial report alleged that the crypto lender's directors ‘downplayed' the extent of its exposure to the Terra ecosystem.

Crypto Lender Hodlnaut Lost Almost $190 Million in Terra Crash: Report

The Supreme Court of Singapore will this week hold a hearing on a class-action lawsuit filed against Terraform Labs CEO Do Kwon.

Terra Co-Founder Do Kwon Faces $57M Class-Action Lawsuit in Singapore

The Digital Assets Fund, which had Terra's collapsed token as a core holding, now has $191.7 million in sales.

Crypto Hedge Fund Arca Nearly Doubles Sales for Flagship Fund Despite LUNA Exposure

Only two crypto executives represented the industry, though lawmakers asked five to attend.

How South Korea's National Assembly Got Stood Up by Crypto Industry Reps at Terra Hearing

Several witnesses have been absent from recent parliamentary inquiries as South Korean authorities continue to probe the Terra collapse.

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