Briola, Antonio;
Vidal-Tomás, David;
Wang, Yuanrong;
Aste, Tomaso;
(2022)
Anatomy of a Stablecoin's failure: the Terra-Luna case.
arXiv: Ithaca, NY, USA.
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Abstract
We quantitatively describe the main events that led to the Terra project's failure in May 2022. We first review, in a systematic way, news from heterogeneous social media sources; we discuss the fragility of the Terra project and its vicious dependence on the Anchor protocol. We hence identify the crash's trigger events, analysing hourly and transaction data for Bitcoin, Luna, and TerraUSD. Finally, using state-of-the-art techniques from network science, we study the evolution of dependency structures for 61 highly capitalised cryptocurrencies during the down-market and we also highlight the absence of herding behaviour analysing cross-sectional absolute deviation of returns.
| Type: | Working / discussion paper |
|---|---|
| Title: | Anatomy of a Stablecoin's failure: the Terra-Luna case |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.48550/arXiv.2207.13914 |
| Publisher version: | https://doi.org/10.48550/arXiv.2207.13914 |
| Language: | English |
| Additional information: | Copyright © The Author 2022. This article is licensed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) Licence (https://creativecommons.org/licenses/by-nc-nd/4.0/). |
| Keywords: | Stablecoin, Cryptocurrency, LUNA, UST, Network Science, Herding |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10161357 |
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