{
  "title": "Stablecoin crisis comparison: UST (May 2022), USDC (March 2023), DAI (March 2020)",
  "research_retrieved_utc": "2026-09-25T03:52:57Z",
  "disclaimer": "One-time historical research comparison; not investment advice.",
  "labels": {
    "fact": "stated in a cited source",
    "inference": "author interpretation",
    "uncertain": "conflicting or missing evidence"
  },
  "cases": [
    {
      "id": "ust-2022",
      "token": "UST (TerraUSD)",
      "episode_window": "2022-05-07 to 2022-05-16",
      "crisis_type": "token peg / design failure",
      "outcome": "collapsed; peg never restored",
      "mechanisms": {
        "backing": "No exogenous collateral per token; 1 UST swappable for $1 of newly minted LUNA via market module; discretionary LFG reserve (~80,000 BTC).",
        "issuance": "Protocol mint/burn against LUNA through virtual constant-product pool; capacity limited by BasePool/PoolRecoveryPeriod (docs default 250,000 SDR; live value reported as 50M SDR, ~$293M/day, per Proposal 1164 as reported by CoinDesk).",
        "redemption_exit": "Swap UST for LUNA (capped, spread) or sell on secondary markets (Curve, CEXs).",
        "governance": "LUNA staker on-chain governance; Terraform Labs and LFG discretion in practice.",
        "demand_support": "Anchor Protocol marketed up to ~20% yield (SEC allegation)."
      },
      "trigger": "Large UST exits and sales around 2022-05-07/08; initial actors disputed.",
      "spread": "[Inference] Capped swap capacity slowed arbitrage; redemption minted LUNA, collapsing LUNA price and the backstop; BTC reserve sales insufficient.",
      "response": [
        "LFG deployed 80,081 BTC and 49.8M stablecoins (~$2.8B) May 8-12",
        "LFG announced $1.5B BTC/UST loans (2022-05-09)",
        "Proposal 1164 to raise swap capacity backed by Do Kwon (2022-05-11)"
      ],
      "timeline": [
        {
          "date": "2022-05-07/08",
          "event": "UST trades below $1; LFG begins reserve conversion (audit: from May 8)",
          "sources": [
            "lfgaudit",
            "btccom"
          ]
        },
        {
          "date": "2022-05-09",
          "event": "LFG announces $1.5B of BTC and UST loans to defend peg",
          "sources": [
            "cd0509"
          ]
        },
        {
          "date": "2022-05-11",
          "event": "Do Kwon backs Proposal 1164 to expand mint/burn capacity",
          "sources": [
            "cd0511"
          ]
        },
        {
          "date": "2022-05-12",
          "event": "End of audited reserve-defense window",
          "sources": [
            "lfgaudit"
          ]
        },
        {
          "date": "2022-05-16",
          "event": "LFG reports 313 BTC remaining from ~80,000",
          "sources": [
            "cd0516"
          ]
        },
        {
          "date": "2023-02-16",
          "event": "SEC charges TFL and Kwon with fraud",
          "sources": [
            "sec2023"
          ]
        },
        {
          "date": "2024-06-13",
          "event": "$4.47B settlement; TFL wind-down and distribution to victims",
          "sources": [
            "sec2024"
          ]
        }
      ],
      "figures": [
        {
          "name": "combined market value lost (UST, LUNA, MIR)",
          "value": "~$40 billion",
          "source": "sec2023",
          "period": "through end of May 2022",
          "method": "market value, per SEC",
          "limitations": "Not net realized investor loss; mixes paper wealth and realized losses."
        },
        {
          "name": "LFG reserve spent",
          "value": "80,081 BTC + 49.8M stablecoins (~$2.8B)",
          "source": "lfgaudit",
          "period": "2022-05-08 to 2022-05-12",
          "method": "audit of wallets/exchange accounts valued at execution",
          "limitations": "Commissioned by LFG; primary not directly retrieved (403); figures via bitcoin.com summary."
        },
        {
          "name": "LFG BTC remaining",
          "value": "313 BTC",
          "source": "cd0516",
          "period": "2022-05-16",
          "method": "LFG self-report",
          "limitations": "Secondary report of issuer statement."
        },
        {
          "name": "settlement",
          "value": "$4.47B from TFL (disgorgement, interest, penalty) plus ~$204M from Kwon",
          "source": "sec2024",
          "period": "2024-06-13",
          "method": "court-approved settlement",
          "limitations": "Collection and victim recovery rates not verified."
        }
      ],
      "loss_categories": [
        {
          "group": "UST holders",
          "type": "realized",
          "note": "Peg never restored."
        },
        {
          "group": "LUNA holders",
          "type": "realized",
          "note": "Hyperinflation of LUNA supply via redemptions."
        },
        {
          "group": "LFG (reserve)",
          "type": "realized",
          "note": "Reserve spent defending peg."
        },
        {
          "group": "Terra creditors/victims",
          "type": "partial recovery uncertain",
          "note": "Distribution under TFL liquidation plan; amounts not verified."
        }
      ],
      "sources": [
        {
          "id": "terradocs",
          "url": "https://classic-docs.terra.money/docs/develop/module-specifications/spec-market.html",
          "date": null,
          "type": "primary",
          "kind": "protocol documentation (undated archival docs of original chain)"
        },
        {
          "id": "sec2023",
          "url": "https://www.sec.gov/newsroom/press-releases/2023-32",
          "date": "2023-02-16",
          "type": "primary",
          "kind": "regulator allegation (contemporaneous to litigation, retrospective to event)"
        },
        {
          "id": "sec2024",
          "url": "https://www.sec.gov/newsroom/press-releases/2024-73",
          "date": "2024-06-13",
          "type": "primary",
          "kind": "regulator settlement release (retrospective)"
        },
        {
          "id": "doj",
          "url": "https://www.justice.gov/usao-sdny/pr/crypto-enabled-fraudster-sentenced-orchestrating-40-billion-fraud",
          "date": null,
          "type": "primary",
          "kind": "DOJ release (retrospective); page did not render at retrieval, date unconfirmed"
        },
        {
          "id": "lfgaudit",
          "url": "https://medium.com/terra-money/lfg-technical-audit-report-ddaf3f51e7d",
          "date": "2022-11-16",
          "type": "primary",
          "kind": "LFG-commissioned JS Held audit (retrospective); direct retrieval returned HTTP 403, figures taken via secondary summary"
        },
        {
          "id": "btccom",
          "url": "https://news.bitcoin.com/terras-2-8b-defense-system-luna-foundation-guard-audit-says-group-spent-more-than-80000-bitcoin-defending-ust-peg/",
          "date": "2022-11",
          "type": "secondary",
          "kind": "press summary of audit"
        },
        {
          "id": "cd0509",
          "url": "https://www.coindesk.com/markets/2022/05/09/luna-foundation-guard-lens-15b-in-btc-and-ust-for-stablecoin-peg",
          "date": "2022-05-09",
          "type": "secondary",
          "kind": "contemporaneous press"
        },
        {
          "id": "cd0511",
          "url": "https://www.coindesk.com/business/2022/05/11/terra-founder-do-kwon-supports-communitys-ust-proposal-luna-drops-to-22",
          "date": "2022-05-11",
          "type": "secondary",
          "kind": "contemporaneous press reporting Proposal 1164"
        },
        {
          "id": "cd0516",
          "url": "https://www.coindesk.com/business/2022/05/16/luna-foundation-guard-left-with-313-bitcoin-after-ust-crash",
          "date": "2022-05-16",
          "type": "secondary",
          "kind": "contemporaneous press reporting LFG statement"
        }
      ],
      "uncertainty_notes": [
        "Identity/coordination of initial large exits unresolved in primary record.",
        "Proposal 1164 on-chain record not directly retrieved.",
        "Kwon sentencing date not confirmed (DOJ page did not render); plea August 2025 per DOJ case page.",
        "Exact UST price lows not reported here to avoid unverified figures."
      ]
    },
    {
      "id": "usdc-2023",
      "token": "USDC",
      "episode_window": "2023-03-10 to 2023-03-15",
      "crisis_type": "reserve banking / redemption-rail shock",
      "outcome": "recovered within days",
      "mechanisms": {
        "backing": "Cash and short T-bills; post-crisis 77% T-bills ($32.4B) and 23% cash ($9.7B), BNY Mellon custody, BlackRock management; $3.3B (~8%) had been at SVB.",
        "issuance": "Circle mints 1:1 against USD wires from account holders.",
        "redemption_exit": "Circle 1:1 redemption via bank wire for account holders; others sell on secondary markets.",
        "governance": "Circle (regulated company); Centre consortium with Coinbase [uncertain, not primary-verified here]."
      },
      "trigger": "Silicon Valley Bank closure on 2023-03-10 with $3.3B of USDC reserves deposited there.",
      "spread": "[Inference] Weekend closure of bank rails left secondary markets as only exit; stress spread to DAI via ~$3.1B USDC in Maker PSM and to other DeFi protocols.",
      "response": [
        "Treasury/Fed/FDIC guarantee all SVB deposits (2023-03-12)",
        "Circle confirms $3.3B fully available and new banking partners (2023-03-13)",
        "Maker emergency PSM limits (2023-03-11)"
      ],
      "timeline": [
        {
          "date": "2023-03-10",
          "event": "SVB closed; Circle discloses $3.3B of ~$40B reserves at SVB",
          "sources": [
            "theblock0310"
          ]
        },
        {
          "date": "2023-03-11",
          "event": "USDC low of $0.88 on CoinGecko",
          "sources": [
            "cnbc0311"
          ]
        },
        {
          "date": "2023-03-11",
          "event": "Maker emergency executive: PSM-USDC-A gap 950M->250M DAI, tin 0%->1%, GSM delay 48h->16h",
          "sources": [
            "maker2023"
          ]
        },
        {
          "date": "2023-03-12",
          "event": "Joint statement: SVB depositors to have access to all money from March 13",
          "sources": [
            "fed0312"
          ]
        },
        {
          "date": "2023-03-13",
          "event": "Circle: $3.3B fully available; operations resume via new banking partners",
          "sources": [
            "circle0313"
          ]
        },
        {
          "date": "2023-03-14/15",
          "event": "Domestic wires live March 14; backlog substantially cleared; $3.8B redeemed and $0.8B minted since Monday",
          "sources": [
            "circle0315"
          ]
        }
      ],
      "figures": [
        {
          "name": "reserves at SVB",
          "value": "$3.3B (~8% of ~$40B)",
          "source": "circle0313",
          "period": "2023-03-10 to 03-13",
          "method": "issuer disclosure",
          "limitations": "Issuer self-report."
        },
        {
          "name": "price low",
          "value": "$0.88",
          "source": "cnbc0311",
          "period": "2023-03-11 (weekend)",
          "method": "CoinGecko aggregate price",
          "limitations": "Venue-dependent, thin weekend liquidity; other venues differ."
        },
        {
          "name": "redemptions/mints after reopening",
          "value": "$3.8B redeemed, $0.8B minted",
          "source": "circle0315",
          "period": "Monday 2023-03-13 to close 2023-03-15",
          "method": "issuer report",
          "limitations": "Issuer self-report."
        },
        {
          "name": "Maker USDC exposure",
          "value": "~$3.1B",
          "source": "ct2023",
          "period": "2023-03-11",
          "method": "press citing Maker data",
          "limitations": "Secondary."
        }
      ],
      "loss_categories": [
        {
          "group": "USDC reserve / Circle",
          "type": "temporary mark-to-market, not realized",
          "note": "SVB deposit fully made available after government guarantee."
        },
        {
          "group": "Holders who sold below $1",
          "type": "realized",
          "note": "Aggregate amount undocumented."
        },
        {
          "group": "Buyers below $1 / arbitrageurs",
          "type": "realized gain",
          "note": "Aggregate amount undocumented."
        },
        {
          "group": "DAI and USDC-collateralized DeFi",
          "type": "temporary risk",
          "note": "DAI depegged alongside USDC; Maker cut PSM intake."
        }
      ],
      "sources": [
        {
          "id": "circle0313",
          "url": "https://www.circle.com/pressroom/3-3-billion-of-usdc-reserve-risk-removed-dollar-de-peg-closes",
          "date": "2023-03-13",
          "type": "primary",
          "kind": "issuer announcement (contemporaneous)"
        },
        {
          "id": "circle0315",
          "url": "https://www.circle.com/blog/march-15-update-on-usdc-operations",
          "date": "2023-03-15/16",
          "type": "primary",
          "kind": "issuer announcement (contemporaneous)"
        },
        {
          "id": "fed0312",
          "url": "https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm",
          "date": "2023-03-12",
          "type": "primary",
          "kind": "Treasury/Fed/FDIC joint statement (contemporaneous)"
        },
        {
          "id": "maker2023",
          "url": "https://vote.makerdao.com/executive/template-executive-vote-emergency-parameter-changes-march-11-2023",
          "date": "2023-03-11",
          "type": "primary",
          "kind": "governance record (contemporaneous)"
        },
        {
          "id": "theblock0310",
          "url": "https://www.theblock.co/news/business/2023-03-10-circle-says-3-3-billion-of-usdc-reserves-are-with-silicon-valley-bank-218971",
          "date": "2023-03-10",
          "type": "secondary",
          "kind": "contemporaneous press quoting Circle"
        },
        {
          "id": "cnbc0311",
          "url": "https://www.cnbc.com/2023/03/11/stablecoin-usdc-breaks-dollar-peg-after-firm-reveals-it-has-3point3-billion-in-svb-exposure.html",
          "date": "2023-03-11",
          "type": "secondary",
          "kind": "contemporaneous press citing CoinGecko"
        },
        {
          "id": "ct2023",
          "url": "https://cointelegraph.com/news/maker-dao-files-emergency-proposal-addressing-3-1b-usdc-exposure",
          "date": "2023-03",
          "type": "secondary",
          "kind": "contemporaneous press"
        }
      ],
      "uncertainty_notes": [
        "Counterfactual recovery of uninsured SVB deposit without systemic-risk exception is unknowable.",
        "Volume sold below par not documented.",
        "Initial $3.3B disclosure retrieved via secondary report of Circle's tweet."
      ]
    },
    {
      "id": "dai-2020",
      "token": "DAI (Multi-Collateral)",
      "episode_window": "2020-03-12 to 2020-03-28",
      "crisis_type": "collateral liquidation / oracle / network-congestion failure (contained)",
      "outcome": "recovered; system recapitalized via MKR dilution",
      "mechanisms": {
        "backing": "Overcollateralized ETH and BAT vaults (USDC added 2020-03-17).",
        "issuance": "Users lock collateral at >=150% minimum ratio and mint DAI.",
        "redemption_exit": "No holder redemption except Emergency Shutdown; peg via arbitrage, stability fee and DAI Savings Rate; secondary markets.",
        "liquidation": "Keeper-run flip auctions (flip.sol); bad debt covered by surplus buffer then MKR minted in debt (flop) auctions (flop.sol).",
        "governance": "MKR-holder polls and executive votes; Maker Foundation support."
      },
      "trigger": "ETH fell ~43% ($194 to $111) on 2020-03-12 amid Ethereum congestion, gas spikes and oracle lag.",
      "spread": "Keepers failed to bid; one bidder won auctions at 0 DAI over ~2-3 hours; system surplus went from +$500k to about -$4M. [Inference] DAI pressure was upward (demand to repay debt).",
      "response": [
        "Out-of-schedule executive vote on auction parameters (2020-03-13)",
        "USDC added as collateral (2020-03-17)",
        "MKR debt auctions 2020-03-19 to 03-28",
        "Compensation poll rejected (2020-09-22)"
      ],
      "timeline": [
        {
          "date": "2020-03-12",
          "event": "ETH crash; zero-bid auctions; forum reports surplus +$500k to -$4M and 'Dai is off-peg'",
          "sources": [
            "makerforum",
            "glassnode"
          ]
        },
        {
          "date": "2020-03-13",
          "event": "Out-of-schedule executive vote on auction parameters",
          "sources": [
            "linum"
          ]
        },
        {
          "date": "2020-03-17",
          "event": "USDC added as collateral via emergency executive",
          "sources": [
            "ctusdc"
          ]
        },
        {
          "date": "2020-03-19 to 2020-03-28",
          "event": "Debt auctions sell 20,980 MKR for ~5.3M DAI",
          "sources": [
            "block0331"
          ]
        },
        {
          "date": "2020-09-22",
          "event": "MKR poll: ~65% for 0% compensation to vault owners",
          "sources": [
            "cd0923"
          ]
        }
      ],
      "figures": [
        {
          "name": "system deficit (forum)",
          "value": "~$4M",
          "source": "makerforum",
          "period": "2020-03-12 (same day)",
          "method": "system surplus reading",
          "limitations": "Early estimate."
        },
        {
          "name": "unbacked DAI (Glassnode)",
          "value": "$4.5M",
          "source": "glassnode",
          "period": "as of 2020-03-17",
          "method": "on-chain analysis",
          "limitations": "Secondary."
        },
        {
          "name": "deficit / zero-bid liquidations (Whiterabbit)",
          "value": "5.67M DAI; 62,842.93 ETH (~$8.32M) across 1,461 auctions for 0 DAI",
          "source": "whiterabbit",
          "period": "2020-03-12/13",
          "method": "on-chain auction analysis",
          "limitations": "Independent, undated; ETH valuation timing differs."
        },
        {
          "name": "debt auction proceeds",
          "value": "~5.3M DAI for 20,980 MKR",
          "source": "block0331",
          "period": "2020-03-19 to 03-28",
          "method": "press summary of on-chain auctions",
          "limitations": "Secondary."
        },
        {
          "name": "ETH price move",
          "value": "-43% ($194 to $111)",
          "source": "glassnode",
          "period": "2020-03-12",
          "method": "daily price",
          "limitations": "Aggregator/exchange dependent."
        }
      ],
      "loss_categories": [
        {
          "group": "Liquidated vault owners (zero-bid)",
          "type": "realized",
          "note": "Lost collateral beyond penalty; compensation rejected Sept 2020."
        },
        {
          "group": "MKR holders",
          "type": "realized (dilution)",
          "note": "20,980 MKR minted and sold."
        },
        {
          "group": "DAI holders",
          "type": "none (no haircut)",
          "note": "Peg deviation was upward; exact premium not verified."
        }
      ],
      "sources": [
        {
          "id": "makerforum",
          "url": "https://forum.skyeco.com/t/black-thursday-response-thread/1433",
          "date": "2020-03-12",
          "type": "primary",
          "kind": "governance forum record (contemporaneous; originally forum.makerdao.com)"
        },
        {
          "id": "flip",
          "url": "https://raw.githubusercontent.com/makerdao/dss/master/src/flip.sol",
          "date": null,
          "type": "primary",
          "kind": "protocol source code (current repo version; live 2020 parameters set by governance, not verified)"
        },
        {
          "id": "flop",
          "url": "https://raw.githubusercontent.com/makerdao/dss/master/src/flop.sol",
          "date": null,
          "type": "primary",
          "kind": "protocol source code (current repo version)"
        },
        {
          "id": "glassnode",
          "url": "https://research.glassnode.com/what-really-happened-to-makerdao/",
          "date": "2020-03-17",
          "type": "secondary",
          "kind": "on-chain analytics (near-contemporaneous)"
        },
        {
          "id": "linum",
          "url": "https://medium.com/linum-labs/black-thursday-makerdaos-multi-collateral-dai-exploitation-and-the-plan-to-recover-c083c0b81875",
          "date": null,
          "type": "secondary",
          "kind": "third-party blog"
        },
        {
          "id": "ctusdc",
          "url": "https://cointelegraph.com/news/makerdao-governance-approves-usdc-stablecoin-as-collateral",
          "date": "2020-03-17",
          "type": "secondary",
          "kind": "contemporaneous press"
        },
        {
          "id": "block0331",
          "url": "https://www.theblock.co/news/defi/2020-03-31-mkr-auctions-conclude-with-crypto-venture-firm-paradigm-emerging-as-the-biggest-winner-60447",
          "date": "2020-03-31",
          "type": "secondary",
          "kind": "contemporaneous press"
        },
        {
          "id": "cd0923",
          "url": "https://www.coindesk.com/tech/2020/09/23/makerdao-users-hosed-by-march-flash-crash-wont-get-mkr-payouts-say-mkr-whales",
          "date": "2020-09-23",
          "type": "secondary",
          "kind": "contemporaneous press on governance poll"
        },
        {
          "id": "whiterabbit",
          "url": "https://medium.com/@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6",
          "date": null,
          "type": "secondary",
          "kind": "independent on-chain analysis"
        },
        {
          "id": "cd0414",
          "url": "https://www.coindesk.com/tech/2020/04/14/makerdao-users-sue-stablecoin-issuer-following-black-thursday-losses",
          "date": "2020-04-14",
          "type": "secondary",
          "kind": "contemporaneous press"
        }
      ],
      "uncertainty_notes": [
        "Deficit estimates conflict (~$4M, $4.5M, 5.67M DAI, 5.3M DAI raised) due to timing, buffer netting and valuation.",
        "Exact DAI premium not found in a primary source; no figure reported.",
        "April 2020 class action outcome not verified.",
        "Primary sources for 2020: forum thread plus dss flip/flop contract code (current versions; live auction timings on 2020-03-12 not verified). Governance vote records cited via secondary press; docs.makerdao.com now redirects."
      ]
    }
  ],
  "comparison": {
    "kind_of_crisis": {
      "ust-2022": "token design/peg",
      "usdc-2023": "reserve bank/redemption rail",
      "dai-2020": "liquidation/oracle system"
    },
    "peg_direction": {
      "ust-2022": "below $1, permanent",
      "usdc-2023": "below $1 (low $0.88), temporary",
      "dai-2020": "above $1, temporary (unverified figure)"
    }
  },
  "lessons": [
    "Ask whether the backing is independent of the coin.",
    "Map every exit path and when it operates.",
    "Identify the loss absorber and its size.",
    "Stress-test infrastructure, not just collateral.",
    "Read figures by measurement type."
  ],
  "unanswered_questions": [
    "Who executed the initial UST exits, and did they coordinate?",
    "How much have Terra creditors recovered through the bankruptcy?",
    "What was the exact DAI premium in March 2020, and what was the reconciled final deficit?",
    "How much USDC was sold below par, and by whom?"
  ]
}