The terra network and its leader Do Kwon rose to the highest levels of the crypto world thanks to big investors, only to fall apart in a matter of days in May 2022.
On May 7, the price of the then $18 billion algorithmic stablecoin terraUSD (UST), which was supposed to be pegged to $1, faltered and dropped to 35 cents on May 9. The related token LUNA, which was supposed to stabilize UST's price, fell from $80 to a few cents by May 12.
CoinDesk has tracked and reported on the rise and ultimate demise of the Terra ecosystem. Below is a detailed timeline of the Terra blockchain story, including Do Kwon's corporate vision to create a price-stable crypto payment system to take on the biggest e-commerce platforms, Terra becoming one of the biggest red-hot crypto projects, Do Kwon's increasing antics on social media, and how it all came crashing down in the end, evaporating the savings of desperate everyday investors.
We'll update this timeline as the story continues to unfold.
2018
- January 2018: Do Kwon and Daniel Shin launch Terra Network with plans to develop Chai, an e-commerce payment app, and create a price-stable cryptocurrency against major fiat currencies to facilitate transactions. It is backed by the Terra Alliance, 15 major e-commerce companies in Asia. (Link)
- April 20: Cyrus Younessi, head of risk at MakerDAO and former research analyst at Scaler, tells Scaler why he believes Terra/LUNA would not work and describes a scenario that would occur later in mid-2022. (link)
- April 23: Terraform Labs, the company developing the Terra blockchain, is launched in Singapore. (link)
2019
- Jan. 30: LUNA is sold to investors via an initial coin offering. Terraform Labs charges 18 cents per token during a seed round and 80 cents per token during a private sale. (Link)
- April: Do Kwon and several co-authors publish Terra Money white paper. (Link)
2020
- Feb. 24: A South Korean crypto exchange launches the first LUNA staking product. (Link)
- July 6: Nicholas Platt, Terra's head of research, introduces the Anchor Protocol, a platform built on Terra that allows investors to earn a high return on their deposits and borrow against their crypto holdings. (Link)
- Sept. 21: UST, the Terra blockchain's stablecoin, is publicly announced, with plans to launch on Ethereum and Solana. (Link)
- Dec. 3: Terra's synthetic equity protocol, Mirror, is launched. (Link)
2021
- Sept. 21: The U.S. Securities and Exchange Commission subpoenas Terraform Labs founder Do Kwon over concerns that Mirror may violate federal securities laws. (link)
- Nov. 28: Do Kwon rules out the possibility of a George Soros-style attack on UST/LUNA that could send the company into a death spiral. Some would later argue, in mid-2022, that this is the kind of scenario that actually hastened Terra's demise. (Link)
- December 22: LUNA's share price nearly doubles to a record high of over $9, up 58% for the month. (Link)
Early 2022
- January 19: Do Kwon announces the formation of the Luna Foundation Guard, an organization tasked with building reserves to "shore up the $UST bond under volatile market conditions" and also providing resources to "support the growth and development of the terra ecosystem" through grants. (Link)
- Feb. 22: Singapore-based Luna Foundation Guard (LFG) raises $1 billion by selling LUNA tokens to buy bitcoin for the UST reserve system, with Jump Crypto and Three Arrows Capital as lead investors. (Link)
March 2022
- March 13: Crypto trader Algod, who compares UST/LUNA to a Ponzi scheme, bets Do Kwon $1 million that LUNA's price will fall below $88 by March next year. Another crypto trader, GiganticRebirth, is betting $10 million against Kwon that LUNA will be below $88 next year. (link and link)
- March 23: Do Kwon tweets "By my hand, DAI will die" as he seriously plans to starve the liquidity of decentralized stablecoin DAI on Curve. (Link)
- March 23: Jump Trading, one of the investors behind LFG, proposes a mechanism for Bitcoin (BTC) reserves to be used to support the price of UST in a crisis. (Link)
- March 25: Rumors emerge that LFG has purchased $125 million worth of Bitcoin (2,840 BTC at the time). (Link)
- March 28: In the past six days, the Luna Foundation Guard bitcoin wallet address buys more than 27,000 BTC worth about $1.3 billion. (Link)
- March 29: Terra's LUNA tokens rise 10% in the past 24 hours to a new all-time high of over $106. (Link)
- March 29: Kyle Davies, co-founder of influential trading firm Three Arrows Capital, tweets, "Grandpa, what did the world look like when $LUNA was less than triple digits?" (link)
- March 30: LFG buys 5,773 BTC worth $272 million this week. (Link)
April 2022
- April 5: The price of the LUNA token reaches an all-time high of $119.2, according to crypto research firm Messari. (Link)
- April 6: LFG buys 5,040 BTC, increasing its holdings to 35,768 BTC, worth $1.6 billion at the time. (Link)
- April 7: LFG purchases $100 million worth of AVAX with UST stablecoins. (Link)
- April 11: LFG adds $173 million in bitcoin to its wallet over the weekend through a series of purchases. It now has 39,897.98 bitcoin in its wallet. (Link)
- April 14: Terraform Labs gives 10 million LUNA tokens worth $820 million to LFG. (Link)
- April 19, 2022: LUNA outperforms the broader crypto market, rising 17% in one day and pushing its price above $90. UST becomes the third largest stablecoin. (Link)
- April 27: LUNA's circulating supply hits an all-time low of 346 million tokens as LUNA tokens are burned to keep up with rising demand for UST. (Link)
May 2022
- May 7: Signs of capital flight from UST: Curve Whale Watching, a bot that monitors and tweets large amounts of swaps, shows a swap of 85 million UST against 84.5 million USDC (Link)
- May 8: UST fell to a low of $0.985 on Saturday after a series of large UST purchases were recorded on Terra's lending protocol Anchor and stablecoin exchange protocol Curve. (Link)
- May 8: LFG commits to lending 750 million BTC to market makers to defend UST pegging, and to use another 750 million UST to buy back BTC when volatility subsides. (Link)
- May 8: Do Kwon quips his way out of UST decoupling risk. (Link)
- May 9: Deposits on the Anchor Protocol fall from $14 billion to under $9 billion after UST struggles to recover to $1. ANC, the protocol's token, fell 35% during the day. (Link)
- May 9: UST loses the $1 mark for the second time, falling as low as 35 cents. (Link)
- May 9: Do Kwon tweets, "Deploy more capital - easy, guys." (Link)
- May 10: Claims that UST's price drop is due to a Soros-like attack are raised. (link and link)
- May 11: More than half, 58%, of traders bet on higher LUNA prices despite Tuesday's price drop, leading to $63 million in liquidations. (Link)
- May 11: LUNA reaches price levels last seen in August 2021, with the value of Anchor, Terra's largest decentralized financial protocol (DeFi), falling $11 billion in two days. (Link)
- May 11: Do Kwon emerges as one of the pseudonymous co-founders of failed algorithmic stablecoin Basis Cash, CoinDesk reports. (Link)
- May 12: LUNA price drops 96% in one day to less than 10 cents. (Link)
- May 12: The Terra blockchain is officially halted - for the first time at block level 7603700 - after LUNA's price plummets, threatening the network's security. (Link)
- May 12: The Terra blockchain is halted for the second time at block 7607789, but resumes activity after about nine hours. (Link)
- May 13: Exchanges Okx and Binance stop trading Terra tokens after UST loses its dollar peg and LUNA plunges more than 99%. Binance later resumes trading LUNA. (Link)
- May 13: Do Kwon unveils a "revival plan" to distribute network ownership through 1 billion new tokens to UST and LUNA holders (link).
- May 14: Data analytics firm Elliptic follows LFG's 3.5 billion BTC reserve to major exchanges Gemini and Binance. (Link)
- May 16: LFG confirms it has reduced its BTC reserves from about 80,000 bitcoins to 313 bitcoins while trying to save UST's connectivity. (Link)
- May 16: Do Kwon proposes to fork Terra without UST, calling the current chain "Terra Classic." (Link)