Several large Terra holders exited their positions, while retail holders kept accumulating early into the crash, a report shows.

Jump Capital- a major investor in Terra- said in a report that some of the blockchain’s largest holders had liquidated their holdings just as the UST stablecoin began to depeg in early-May.

In contrast, smaller wallets continued to accumulate. Jump noted that a series of large withdrawals and swaps in a UST liquidity pool had kicked off the depegging.

A bulk of outflows were also centered around Terra’s Anchor Protocol, which saw a flurry of withdrawals when UST just began depegging. Jump cited on-chain data in the report.

Anchor Protocol played a major role in Terra crash

Jump cited a recent report by on-chain analytics firm Nansen, which identified seven main wallets that drove outflows from Anchor. But these seven were part of a much broader trend.

Wallets with over $1 million in Anchor deposits, which Jump describes as “large” depositors, cut over 40% of their holdings on the platform during the initial depegging.

Small depositors- with wallets holding less than $10,000 on Anchor, in contrast, increased their holdings on the platform in this period. But given that they made a fraction of overall liquidity, this demand did little to support LUNA and UST prices.

Anchor Protocol was essentially ground zero for the Terra crash, given that 70% of UST liquidity was locked into the platform. The platform’s imbalance between depositors and borrowers also contributed to its eventual downfall.

Crypto sentiment also played a major role

Outflows from Terra were exacerbated by poor crypto market sentiment. The depegging came in the wake of a crash in the market, triggered by a Federal Reserve rate hike. Strong U.S. inflation numbers also contributed to this tumble.

Terra’s crash wiped out over $30 billion of investors funds in a matter of days. It has attracted regulatory ire from across¬† the globe, and is expected to prompt stricter laws on crypto.

While Terra has since launched a new blockchain to help restore some value, the project appears to have lost most of its goodwill with the market.

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