Timeline of the Decline
April 2022
$119.18
All-Time High - Peak euphoria
May 7, 2022
$85.00
UST begins to depeg, large withdrawals from Anchor
May 12, 2022
$0.0001
Death spiral collapse - UST loses peg completely
Current
$0.00008
Post-collapse trading
What Went Wrong
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Algorithmic Stablecoin Death Spiral
UST's peg mechanism relied on minting/burning LUNA. When UST lost its peg, hyperinflation of LUNA supply caused exponential price collapse.
-
Anchor Protocol Ponzinomics
20% APY on UST deposits was unsustainable. When yields couldn't be maintained, mass withdrawals triggered the depeg.
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Coordinated Attack Theory
Evidence suggests a coordinated short attack exploited the algorithmic weakness, profiting billions from the collapse.