Why Did Luna Crash?

Once upon a time in the crypto galaxy, Luna was the name of a shining star that provided its investors with hefty profits. But suddenly, Luna Crashed, not on earth but deeper, straightly to hell. How did this happen, and what does it mean? Watch the video and let us know what you think.

Luna was once the shining star of the crypto galaxy.

But just in a few days, it lost almost 100% of its value.

Why? First, you should know how Luna works.

Luna is linked to his twin, TerraUSD, a stablecoin.

There is a supply-demand mechanism between the two that lets investors earn decent profits.

More than 75% of all TerraUSDs were deposited in Anchor Protocol, something like a saving account.

People enjoyed a stable 20% fixed interest on their Anchor deposits.

But a rumor spread all over the place: the fixed interest rate is about to change.

Such little rumor led people to panic sell almost all of their TerraUSD, causing its partner to crash.

On the other side, it happened alongside a “bearish rally market” context.

This incident has caused a lot of debates about the nature of “True decentralized finance”.