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Terraform Luna 2022 : $40 Billion Destroyed in 72 Hours by an Algorithm Doing Exactly What It Was Designed To Do — EP79 T1
Description
🔴 Every corporate failure leaves behind a pattern.
FFL Risk Pattern Scan provides access to a searchable library of documented corporate collapses, frauds and restructurings that can be filtered by geography, sector, collapse mechanism and fraud vector.
Compare live opportunities against historical cases using pattern matching and risk assessment tools designed for investors, lenders and deal teams.
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The death spiral was not a bug. It was the algorithm working as intended once selling pressure began. UST, the algorithmic stablecoin backed by nothing but its reflexive relationship with LUNA, collapsed from $18.7 billion market cap to near zero in three days in May 2022, destroying approximately $40 billion. Do Kwon, its architect, was later sentenced to 15 years in U.S. federal prison.
This is the financial autopsy of Terraform Labs — the subsidized yield + reflexive tokenomics mechanism that made collapse mathematically inevitable once confidence cracked.
We dissect Anchor Protocol’s 20% yield (funded by Terraform’s own reserves), the 2021 secret bailout by Jump Crypto, and the death spiral mechanics that no reserve could stop.
Quick note before we start — the FFL Case Library is live. Eighty forensic cases, three tools, runs offline. This is Episode 80. Today we close the first library. Link in the show notes.
Financial Forensics Labs — Every collapse has a pattern. We dissect it. Layer by layer.
KEYWORDS
Terraform Luna collapse, UST death spiral, Do Kwon 15 years prison, Anchor Protocol 20% yield fraud, algorithmic stablecoin failure, Luna Foundation Guard Bitcoin