Terra / Luna
Terra / Luna was a Bitcoin company in the Stablecoins & Payments category, founded in 2018 by Do Kwon, Daniel Shin (also Terraform Labs).
The Idea
Build an alternative blockchain ecosystem with a stablecoin (UST) backed by a mechanism token (LUNA), not dollar reserves. Kwon's bet was that they could create a more 'efficient' stablecoin than Tether or USDC.
Early Traction
In 2021-2022, Terra had the fastest-growing ecosystem in digital assets. UST became a top-5 stablecoin by market cap. Massive VC backing from Galaxy Digital, a16z, Pantera, and others.
Peak Stats
At its April 2022 peak, LUNA traded near $119 and the broader Terra ecosystem was worth roughly $40B, with UST the third-largest stablecoin. In May 2022, UST lost its dollar peg and LUNA collapsed from tens of dollars to fractions of a cent within days, erasing an estimated $40B.
Status Today
Do Kwon was arrested in Montenegro in 2023 and, after a lengthy extradition fight, was extradited to the United States on December 31, 2024. He initially pleaded not guilty, then pleaded guilty in August 2025 to two U.S. fraud charges and agreed to forfeit about $19 million. Terraform Labs wound down.
Why It Matters
Terra/Luna is the most dramatic implosion in digital asset history, an entire $40B ecosystem destroyed in 48 hours. It proved that mechanism-based stablecoins without hard collateral backing are inherently unstable, and that the 20% yield promised by Anchor was economically impossible to sustain.