TerraUSD / LUNA · interactive mechanism simulation

Arbitrageurs mint/burn 1 UST for exactly $1 of LUNA through the Terra chain's market module, holding UST near $1. Anchor Protocol's subsidized ~20% yield pulls in deposit demand. The Luna Foundation Guard's BTC reserve sits as a backstop. Edit the parameters — or trigger the death spiral to see how the same mechanism that defends the peg in calm markets can hyperinflate LUNA and destroy it under stress.
Anchor Protocol 20% APY on UST deposits Arbitrageurs buy low → sell high Terra Market Module $1 LUNA ⇄ 1 UST, always 0 mints · 0 redemptions LUNA absorber / staking token — UST — peg: on target LFG Bitcoin Reserve exogenous peg backstop — ⚠ DEATH SPIRAL — LUNA hyperinflating, peg collapsing (illustrative)
UST price
$1.0000
LUNA price
$80.00
LUNA supply
350M
UST supply
$18.0B
LFG BTC reserve
$2.40B
Parameters — edit me
20%
1.5×
1.2/s
$2.4B
5×
Controls

Illustrative simulation. Starting values (LUNA ≈$80, UST supply ≈$18B, LFG reserve ≈$2.4B BTC) mirror the researched scale of the real Terra ecosystem near its 2022 peak, but trade sizes, timing, and the death-spiral trajectory are simplified and randomized for visualization — not live onchain data or a precise re-enactment of May 2022. Part of The Onchain Experiment Atlas.