Pop goes the weasel
In May 2022, Terra’s Stablecoin (UST) lost its peg to the dollar. In other words, it stopped being ‘stable’. Now let that sink in!! As a stablecoin, UST only had one role, one reason to exist, one destiny to fulfil. And suddenly, that foundational aspect was shaken. Over the next few days, UST fell sharply, bringing down the entire Luna ecosystem with it. Ultimately, it brought down crypto hedge fund Three Arrows Capital (“3AC”) which contributed to the downfall of Celsius, BlockFi, Voyager, and other lenders. Billions of dollars evaporated in quick time.
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