# Week in Crypto Drama #8 By [0xKΞRM4](https://paragraph.com/@0xk-rm4) · 2022-05-13 --- Welcome to **Week in Crypto Drama!** This week we witnessed one of the greatest failures in crypto - an algorithmic stablecoin protocol/chain with a $40B market cap reduced to nothing within days. Or if you’re into shorts - “How to make billion dollars, [Soros style](https://mobile.twitter.com/OnChainWizard/status/1524123935570382851).” > $UST is 100 magic dollars backed by 20 bitcorns and 80 magic beans, but some people don’t think it’s worth 100 real dollars, so LFG is selling bitcorns to buy more magic dollars to convince people they’re worth 100 real dollars, all so the magic bean holders don’t get sad — [@jonwu\_](https://twitter.com/jonwu_/status/1523793597979500544) The saga began on Saturday when $UST started to depeg on Binance due to large [curve](https://twitter.com/7ommyZero/status/1523032846339764224) [swaps](https://twitter.com/0xHamz/status/1523003049379123201). CT was quick to track down whale [transactions](https://twitter.com/mhonkasalo/status/1523137936119582721), and [Do](https://twitter.com/AlgodTrading/status/1523060566536994816) decided it’s wise to start the [blame game](https://twitter.com/FreddieRaynolds/status/1523148819361595392). The peg was [saved](https://twitter.com/CurveFinance/status/1523170253316005890), but panic set in and some whales started to [abandon ship](https://twitter.com/kamikaz_ETH/status/1523239524981420032). For a moment it looked like [another fluke](https://twitter.com/Route2FI/status/1523227731231707142), but still [very fishy](https://twitter.com/Mudit__Gupta/status/1523306186761596929). Monday started with LFG [loan action](https://twitter.com/LFG_org/status/1523512201088143360). And “deploying more [capitial](https://twitter.com/stablekwon/status/1523733542492016640)” meant [1.4B](https://twitter.com/DaxxTrader/status/1523732538350395392) worth of BTC was sold. But Do's size was [not size](https://twitter.com/AlgodTrading/status/1524133865694113794) either. Chains [halted](https://twitter.com/DegenSpartan/status/1523701655065473025), [rumours](https://twitter.com/lawmaster/status/1524098409594077185) were [spreading](https://twitter.com/gainzxbt/status/1523951199720022017), and [meme](https://twitter.com/bitbitcrypto/status/1524240479931490304) game was [strong](https://twitter.com/mewn21/status/1523673936713580544). $UST value dropped to 30 cents on Tuesday and to 10 cents by Friday. $LUNA was furiously minted to defend the peg and it’s value tanked to 0. Terra blockchain was [halted](https://twitter.com/terra_money/status/1524785058296778752) on Thursday. [It’s over](https://rekt.news/luna-rekt/) ☠ The sad part? All of this was [predicted](https://twitter.com/FreddieRaynolds/status/1463960623402913797) [six months](https://mobile.twitter.com/davidgerard/status/1524338482763776000) ago and was well [known](https://twitter.com/jonwu_/status/1523793513179074560) in the industry. Remember **The Bet** between [Algod](https://twitter.com/AlgodTrading/status/1524919001612156935) and Do? And how GCR put some [real size](https://mobile.twitter.com/GiganticRebirth/status/1522903921492168705) to it? Do thought it’s a good idea to [shitpost](https://twitter.com/Tree_of_Alpha/status/1523961417988251649) the issue under the carpet. While algorithmic stablecoin would be the holy grail - it won’t be built by dudes who call themselves [Rick and Morty](https://www.coindesk.com/tech/2022/05/11/usts-do-kwon-was-behind-earlier-failed-stablecoin-ex-terra-colleagues-say/). Or Zeus, ffs. > The difference between OHM and UST is that you had to be a degen to get into OHM, but normies got suckered into UST — [@0xMiniMoon](https://mobile.twitter.com/0xMiniMoon/status/1524319369014439937) Not-so-stablekwon rekt normies, [koreans](https://mobile.twitter.com/DooWanNam/status/1524946119679041536), and tiktok [investors](https://twitter.com/0xbluecow/status/1523803687851728899). And tries to sue someone over a [satire](https://twitter.com/dreamsofdefi/status/1522891943201628161) published on April 1. SEC will not [be happy](https://www.theblockcrypto.com/post/146426/the-sec-has-already-sued-terraform-labs-it-has-every-reason-to-investigate-ust-lawyers-say). And we have to welcome [regulation](https://www.coindesk.com/policy/2022/05/11/eu-commission-favors-ban-on-large-scale-stablecoins-document-shows/), cause we haven’t [learned](https://mobile.twitter.com/mdudas/status/1524940549727330306) a thing. In other news, Compound Treasury - a DeFi treasury accounts provider - received a S&P Credit Rating. Congrats, it’s [junk](https://twitter.com/Schroomdart/status/1523656329100861447)! Bankless was made [tubeless](https://twitter.com/BanklessHQ/status/1524505993413074944). It seems Google cannot figure out whether they are [pro-](https://nftevening.com/google-cloud-is-all-set-to-enter-web3/) or [anti](https://twitter.com/cdixon/status/1523324803611955202?)\-crypto. No real news from the JPEG world. Some bloke thinks his NFT’s are [priceless](https://twitter.com/cobie/status/1524230491762835456), and founders keep on [rugging](https://mobile.twitter.com/zachxbt/status/1523794973279539202). Try [selling](https://mobile.twitter.com/cobie/status/1524431364715470849) maybe? Enjoy the weekend, and remember to close your risky positions 🍻 --- *Originally published on [0xKΞRM4](https://paragraph.com/@0xk-rm4/week-in-crypto-drama-8)*