TerraUSD (UST) was collapsed by only 2 traders
The collapse of the Terra ecosystem occurred due to 2 traders.
As it turned out, only 2 traders collapsed the entire Terra ecosystem and caused $60 billion in losses to the industry. This was reported in the report by analysts of Chainalysis. According to their report, everything happened on May 7, when Terraform Labs, as part of a planned operation, withdrew 150 million UST from the Curve-based 3pool liquidity pool. It was this operation that led to increased volatility of the pool.
After 13 minutes, one of the major traders discovered this loophole, and in order to further increase volatility, he exchanged 85 million UST for USDC. An hour later, another trader converted at least 100 million UST into USDC in 4 transactions. This has further increased volatility.
Because of such actions, Terraform Labs withdrew another 100 million bytes from the pool. This was done in order to form a balance between UST and other stablecoins. But it was too late. The above transactions actually destroyed the binding of UST to the US dollar.
In order to somehow save the project, on May 8 and 9, several UST supporters converted USDT into UST in the amount of $ 480 million to balance the pool. On May 9, the LUNA foundation already sold Bitcoins worth several billion dollars to convert to UST. But already on May 10, the fund's reserves dried up, and the UST rate continued to fall rapidly.
At the beginning of May, the UST exchange rate actually fell to zero, amounting to only $ 0.12. The native token of the ecosystem was also under attack, losing its entire value in the LUNA/USD pair.
The report does not specify who exactly turned out to be the two traders who deliberately increased volatility. Analysts have not been able to establish their true identities. As a result of the collapse of the Terra ecosystem, investors lost approximately $ 60 billion. Do Kwon was hit by a wave of criticism and accusations, from which he is still fighting off. Confidence in stablecoins has plummeted in the market.
That's how the actions of just two experienced traders led to the collapse of one of the most famous stablecoins in the world.
Author: Dan, analyst Сoin-signal.com Club Crypto News
https://coin-signal.com/cryptonews/terrausd-ust-was-collapsed-by-only-2-traders/
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