FatMan

As UST depegged from $1 to $0.01, retail investors held the bag - 60.4% of them held it until the bitter end, and the rest suffered an average loss of 70%. But - why? Where did the confidence come from? Let's better understand the truth behind the first depeg - in May 2021.

There were tens of factors at play that increased investor confidence during the 2022 depeg, including LFG advertising, Do Kwon's confident tweets, and Anchor's perceived safety - but savvy investors were looking at historical data. You see, UST has depegged once before. (1/12)

23 May 2021 - a crypto market sell-off jump-starts UST's first ever serious deviation from its peg. You are familiar with the conditions surrounding it - LUNA is dropping, cascading liquidations exacerbate the situation, and UST slips down to $0.95 - Terra is about to die. (2/12)

Here is the truth people don't know. At this point, Do Kwon is desperate to save his baby, and he knows he can't save it himself. He knows the death spiral all too well from Basis Cash (which he hid from investors). LUNA & UST are both on a crash course. He needs capital. (3/12)

He gets on the phone with Jump Crypto, a VC fund he has been working with, and begs them to come to the rescue. Jump's eyes glisten with greed, and right there, the deal is done - Jump will bail Terra out in exchange for a monthly LUNA payment - more details another day. (4/12)

This bailout was never publicized. You won't find articles about it online - it was intentionally concealed from retail investors. We know all of this now thanks to my source from within Jump. But, how did the Jump bailout affect investor behaviour last month? (5/12)