Crypto Twitter Reacts to UST Collapse and Market Meltdown

Crypto Twitter was already operating on all cylinders yesterday, as Bitcoin and other top cryptocurrencies plummeted toward lows not seen in over a year. Then Terra’s stablecoin, UST, fell off a cliff, and the social media platform whirred into overdrive.

UST, designed to hold at the value of the U.S. dollar, fell from a concerning $0.985 to a shocking $.90, then to $.85, then to $.80, then even lower. As the once-stable coin fully depegged from the U.S. dollar, dropping below $.70 late Monday, Crypto Twitter’s resident experts, stakeholders, contrarians, and trolls were all there to process the historic calamity  in real-time.

Questions abounded as UST began, and then continued, to plummet: How could a stablecoin become so ... unstable? Why hasn’t it stopped? Why did this happen to UST and not other stablecoins tied to the dollar?

Aztec’s Jonathan Wu provided a clarifying crash course that analyzed the depegging in real time. 

As with any tribulation filtered through Twitter, reactions to UST’s collapse garnered heapings-on of both concern and smug amusement. Some, like Ryan Selkis, founder of Messari Crypto, warned the implications of the day’s events could spiral far beyond Terra’s success or failure.

In addition to financial consequences, Arthur Breitman, founder of Tezos, predicted a backlash in public perception for all crypto stakeholders.

Twitter’s crypto citizens gripped their screens as UST fell lower and lower, every hour bringing a new, unheard-of reality. As observed by crypto journalist Laura Shin, what was apocalyptic at 5 p.m., was a miracle by 6 p.m.

But for all the panic surrounding the day’s events, industry leaders claimed to be unfazed. Sam Bankman-Fried, founder of FTX, argued the collapse of a stablecoin was a long time coming.

And Mark Cuban postulated that the seemingly unprecedented moment in crypto history actually rhymed with the early-2000s growing pains of Web 2.

Avalanche co-founder Emin Gün Sirer even argued the event had precedent within the context of crypto and stablecoins.

Nonetheless, such contextualizing didn’t stave off the many denizens of Crypto Twitter wary of Terra co-founder Do Kwon’s very public, real-time handling of UST’s disintegration. As Kwon live-tweeted Terra-supporting Luna Foundation Guard’s (ultimately unsuccessful) efforts to loan billions to shore up the stablecoin, some couldn’t help but point out the naked inconsistencies exposed by the strategy.

And, because it’s Twitter, some couldn’t help but leverage the moment for a little sweet revenge. Charles Hoskinson, founder of Cardano, resurfaced an old tweet in which Kwon made a passing comment about buying ADA, Cardano’s cryptocurrency, for negative correlation with Terra’s own coin, LUNA (implying that ADA’s decline was a natural byproduct of LUNA’s rise). Hoskinson tossed one more straw on Kwon’s back, as UST and LUNA nosedived.

As of this writing, UST had returned to a price of $.82.