$200 million and two traders lose $60 billion

Two traders are behind the collapse of the Terra ecosystem. It took just under $200 million to crash $60 billion. The first manipulations against the UST began on the night of May 7 in the Curve-based liquidity pool 3pool.

Analysts have uncovered who may be behind the collapse of the Terra ecosystem, which cost the entire industry an estimated $60 billion.

The collapse of the stablecoin TerraUSD (UST), as well as the entire Terra ecosystem, was triggered by just two traders. Chainalysis analysts announced this in their report.

Terra’s Collapse Unfolds

According to experts, it all started on the night of May 7, when Terraform Labs, in a planned operation, withdrew 150 million UST from 3pool’s curve-based liquidity pool. Such a large and unique operation, according to analysts, increased the volatility of the pool.

Thirteen minutes later, a major trader spotted this flaw and traded 85 million UST for USDC to increase volatility.

Over the next hour, another trader converted a total of 100 million UST into USDC in four tiered trades, increasing volatility.

Consequence: UST lost parity with the dollar

In response to these actions, Terraform Labs withdrew an additional 100 million UST from 3pool. It is claimed that this was done to “balance” the proportion of UST against other stablecoins.

However, by then, large transactions as well as many smaller transactions, had already broken the parity of the UST with the US dollar.

On the same day, and on May 8 and 9, three unknown UST holders converted Tether (USDT) to UST for a total of $480 million to save the project and balance 3pool.

Also on May 9, Luna Foundation Guard (LFG) sold billions of dollars worth of bitcoins to convert them into UST. However, already on May 10, the reserves were exhausted and the UST rate collapsed again.

Remember that the price of the UST on the UST/USD pair went from 1 to 0.12 dollars in early May. The native ecosystem token Terra was also affected, losing 100% of the price of the LUNA/USD pair.

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