Saturday, June 10, 2023

TerraUSD Brought Down by Organized Attack


The Terra ecosystem was allegedly brought down by a big sell order attack, according to crypto Twitter.

This weekend, May 7th, there was an apparent organized attack on the Terra ecosystem. UST worth hundreds of millions of dollars was dumped on Curve Finance. This coincided with an uptick in short interest in Terra Luna. It also contains a spike in Twitter traffic, which resulted in “Ponzi” being a global trend for a few hours.

A Moment in History

Several cryptocurrency Twitter accounts shared screenshots of the instant UST fell below $0.992. This was in response to breaking news that the dollar peg had collapsed. It was even called a watershed moment by some.

However, as indicated by the current price of UST on Binance, the significant de-pegging looks to have been short-lived.

Curve now has three times the trading volume of Uniswap. Because someone began selling UST in large quantities, it began to de-peg. However, because of strong opposition, the peg was reinstated.

One of the first people to recognize the problems on Curve was DegenSpartan. He mentioned a $2 billion decline in Anchor’s locked assets from $14 billion to $11.7 billion. It has dropped even further since the tweet, to its lowest level since January. Two wallets took $372 million out of Anchor in a single day.

Do Kwon reacted to the situation. He advised the females to fud during his awake hours if they wanted to. Terra chain works around the clock, but he’s a new father, for crying out loud.

Successful Stress Test

Some have viewed this as a successful network stress test. Even the most extreme volatility only drove the peg down by 0.7 percent before the algorithm caught up.

According to CryptoHarry, a fundamental analyst, the bad actors understood today was their last chance to de-peg $UST. It was just before the 4pool incentives went online. He further stated that no reputable seller would sell 500 million dollars in UST while liquidity is shifting from 3 to 4 pools. It’s illogical.

As a result of the activity, the total supply of LUNA increased significantly for the first time in months, with 581,984 LUNA being minted. This is one of the reasons why the price of LUNA has dropped in the last 24 hours. The price dropped to $59 before rising to roughly $66. LUNA had dropped 25% at its lowest point due to the UST instability.

Was this a coordinated attack, or did investors simply leave as the yield fell? Is the Crypto Twitter blitz of hate having a snowball effect? The data is still being processed, but TerraUSD remains the world’s third largest stablecoin by market capitalization.


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