![Screenshot_20220610-104711_2.png](https://cdn.steemitimages.com/DQmdriva8H2CZaEBPJKuHsRazoVoRAngW19fCeR7LcNbwvG/Screenshot_20220610-104711_2.png)[image source]( https://www.google.com/amp/s/www.coindesk.com/layer2/2022/05/11/the-luna-and-ust-crash-explained-in-5-charts/%3foutputType=amp)

### ***Introduction***

I greet everyone in the steemit community, for sure I am grateful to each and every one for supporting my activities in steemit. Today I want to discuss the parameter that can give way to crypto crash, using Luna as a case study.

### ***Crypto crisis and it impact on the industry***

The crypto community rejoices when the market is in it's stable condition (the state of being ups and downs 24hrs without a sharp drop) meanwhile if the opposite is the case the weak investors panic uncontrollably. But the experience traders and holders utilize the opportunity to bag more.

### ***Luna ecosystem crash and the challenge it brings to the industry***

### LUNA: Luna is the native token of the terra ecosystem whose main product is the TerraUSD (UST) stable coin launched by Tarraform Labs in 2018 a south Korean company run by Do Kwon. The main goal was to build an algorithmic stable coin in which Terra (LUNA) would be burnt each time Terra UST loses its 1:1 peg to the dollar and vice versa.

More Terra (UST) would be minted and the dollar peg would be stabilized, for instance if Luna hit a 0.1 dollar price Then a small amount of UST would be burnt and if it increases to 1.05 a bit of LUNA would be burnt.

### ***Why LUNA CRISIS***

The crisis was sparked by the liquidation of $285 million in UST to be de-peg and fall below it's pegged price of $1; this results in the generation of Terra tokens which blew out in volume much above expectations. The supply increase to 6.9 trillion token up from 350 millions before the crash.

### ***Rehabilitation effort of LUNA and the effects on crypto industry***

TERRA labs sold out all of it's Bitcoin holdings, totalling 40,000 in an attempt to intervene in the crisis LUNA ecosystem. ### The results The price of drop below $27,000 leading to a crash in the general price of crypto currencies, thereby bringing Bear market.

### ***LUNA rebirth***

After several questions about the future of Luna, the makers of LUNA launched Luna 2.0 on May 28 2022 which is ties to the UST stablecoin, however the old chain and the old Luna Terra will still be in existence, The old chain now saves as Terra classic.

The community has a lot of questions about Luna 2.0, it's deference and airdrop supported by exchanges, additionally many investors eye are on the new Luna price after hitting a record high of $19.5 dollar, hours after lunch it dropped 75% then return to 6.4 and presently $3.6, while the new coins marks a reset for the network holders and those in the crypto currency industry won't forget in a hurry the collapse of the ecosystem any time soon. ### DO YOUR OWN RESEARCH TO INVEST WISELY

### ***Conclusion***

Steemit has given everyone of us a platform to study and equip our self with knowledge of what we don't know. I'm grateful to @patjewell @focusnow @ijelady @chichieze