/ Conviction Index / Terra Luna / UST (Defunct 2022)

Terra Luna / UST (Defunct 2022)

Defunct · LUNA · LUNC · UST · Launched 2018; collapsed May 2022
F

Critical (F) — Conviction Grade

Terra was the third-largest crypto ecosystem before its catastrophic collapse in May 2022 — UST stablecoin de-pegged from $1, triggering a hyper-inflationary collapse of LUNA from ~$80 to fractions of a cent within days. Approximately $40B in market cap evaporated. Founder Do Kwon faced criminal proceedings in South Korea, Montenegro, and the United States. The category-defining cautionary tale for algorithmic stablecoins.

12
Composite / 100
/ Subscore Breakdown · 5 Dimensions

Where this grade comes from.

Protocol Security
F
Governance Decentralization
F
Liquidity
F
Adoption & Utility
F
Regulatory Posture
F
/ Public-Record Events

Key events & disclosures.

  • Launch 2018
  • UST de-peg May 2022
  • ~$40B market cap evaporated
  • Do Kwon criminal proceedings multi-jurisdiction

/ Best for

Not relevant. Cautionary example.

/ Watch out for

Algorithmic stablecoin model has been demonstrated structurally unstable. Avoid algorithmic-stablecoin-derivative designs.