Collapse of Luna coin from $100 to less than a cent
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| Collapse of Luna coin from $100 to less than a cent |
The "Luna" coin fell to levels close to zero by about 4 cents on May 12, 2022, and then continued to collapse and broke the 1 cent barrier, after it was at levels of $100 as the Stable Coins fell below the dollar levels that It is meant to be linked to the US currency.
How was the attack on Luna and UST coins organized?
Initially, the attackers purchased about $1 billion of UST coins, as the Luna coin is pegged to UST Terra, and then nearly $3 billion of bitcoins were borrowed at rates between $40-38 thousand.
After the purchase, reports, and tweets were published with the aim of questioning the ability of the “LUNA” institution to maintain its stable currency in the event of a market decline, and with the objective of spreading these rumors, the attackers opened selling positions on the Bitcoin currency. They carried out high and continuous selling operations in the market with the amounts they borrowed 3 billion dollars.
The luna and the dollar fell so violently that $1.5 billion was committed to defending the UST peg to the US dollar, collateralized against bitcoin reserves.
At one point, just 10 minutes after LUNA pulled some cash out of the Curve pool in preparation for some attack, the attackers pounced on them, and the attackers emptied the Curve pool so quickly, that they needed just $350 million to do so.
After the pool was emptied, they sold the quantity that they had previously purchased from UST on the Binance platform, which is about $1 billion, forming strong selling pressure on it, which led to a sharp drop in its price.
Can the Luna coin go up again?
The founder of Luna and UST coins announced that there are many ideas and proposals, the most important of which is to create a new currency and distribute it to all holders of the two currencies as compensation for the crisis that the Luna currency is facing.
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