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May 9, 2022Crises & controversyFailures & losseswell supported

Terra's stablecoin system enters a collapse

TerraUSD lost its intended dollar peg and the associated LUNA token entered a hyperinflationary collapse.

The failure was not a Bitcoin protocol event, although reserves associated with the project had included a large bitcoin position. Losses and forced deleveraging spread through lenders, funds, and trading firms across the wider market.