A number of bigger Terra (LUNA) ecosystem investors abandoned their positions as the terraUSD (UST) peg began to slip away last month – with smaller-scale investors continuing to buy as the coin’s price plummeted, according to the trading firm Jump Trading Group’s crypto arm Jump Crypto.
Jump Crypto has issued a postmortem on the depegging of the Terra stablecoin, where it revisited the findings of the blockchain analytics firm Nansen, which had pointed out that “seven” wallets – including one linked to Celsius Network (CEL) – may have played a “critical” role as the dollar peg was lost.
On the “seven,” the report’s authors wrote:
“They indeed represent a rapid drawdown that was mirrored more generally by other large wallets.”
But, they added, while these wallets “did indeed comprise much of the early outflow,” they were actually just “part of a much broader trend.”
The report also focused on the role played by Anchor, a savings, lending, and borrowing platform that operated on the Terra platform. The report’s authors, the Jump researchers Nihar Shah and Maher Latif, noted that some bigger UST depositors appear to have exited Anchor in the first few days of May, while some smaller players were buying more between May 7 and May 9.
The UST movements appear to have pulled the stablecoin away from its peg, the researchers explained. On Twitter, the firm added:
“Outflows from Anchor – particularly overnight on May 7 and on the morning and early afternoon of May 9 – put substantial pressure on the UST peg. Large depositors disproportionately drove the outflows. In fact, small depositors increased their exposure during this episode.”
The researchers traced the genesis of the crash to “a combination of trades in the UST/3CRV pool during a seventy-five minute window” on May 7.
They added that trades that involved “withdrawing UST liquidity” and “two wallets putting large UST sell orders” had “upset the pool’s balance and depth.”
Larger depositors could run down almost 15% of their UST positions in Anchor quickly as the peg began to slip on May 6, the report noted – a time when the holders of wallets with less than USD 10,000 in Anchor, were buying more.