What the Industry Learned from it?
On May 9, 2022, Terra Ecosystem collapsed, wiping over $40 Billion; heres what the industry learned in a year. This major event caused industry leader Bitcoin to drop from $28,000 to $19,000. However, people in close proximity lost a lot. It was also a wake-up call for the industry to enhance user protection, liquidity, and transparency. Terra Ecosystem Collapse & Lessons Learned Terra was once the third largest ecosystem after Bitcoin and Ethereum, and it collapsed in just three days in March 2022. The epicenter of the problem was a lending and borrowing protocol, Anchor, promising high yield to its UST depositor. The postmortem of the collapse reveals that the run on Terra was hard to understand and involved multiple chains and assets. Many large holders of UST adjusted their position on May 7, 2022, followed by multiple traders. As blockchain technology allows the actions of others to be viewed, this facility increases the speed of the run. Some investors were first to run and experienced slammer losses, while others who came late to the party incurred heavier losses. The systems complexity made it very difficult even for the insiders to understand the buildup of risk. Preventing governance attacks after a considerable devaluation of Terra