Terra / Luna

Do Kwon promised a stablecoin that didn’t need collateral — just math. UST was pegged to the dollar through an algorithmic dance with its sister token, Luna. At its peak, $40 billion rested on this mechanism. In May 2022, it unraveled in 72 hours. Trustless walks through the death spiral step by step: the first depeg, the failed defense, the bank run that wiped out life savings overnight. Reflexivity can create value. It can also destroy it at the speed of code.