06 The Lunatic Who Crashed Crypto

The 2022 crypto crash, specifically the collapse of the stablecoin TerraUSD (UST) and its associated cryptocurrency Luna, is examined. The failure of UST, designed to maintain a one-to-one value with the US dollar, led to the evaporation of billions and shook the broader crypto market. CoinDesk reporter Danny Nelson provides insights into the situation, including the role of Do Kwon, the founder of Terra, whose brash public persona and algorithmic stablecoin design drew both fervent supporters and sharp criticism. The podcast highlights the unsustainable 20% returns offered by the Anchor protocol within the Terra ecosystem, which attracted users but lacked traditional financial protections, and the lack of real collateral backing the stablecoin.