Let's talk about Luna, the "King of Explosions" in the crypto world—covering the old Luna (now called LUNC) and the restarted LUNA 2.0. Why are these two tokens considered hot potatoes within the community? There are more than one or two reasons.

First, let's address the most fatal scar. The crash in May 2022 still haunts many veteran investors. Luna's price plummeted from a high of $119 directly to nearly zero, evaporating over $45 billion in market value in less than a week, burying more than 200,000 investors worldwide. Such a catastrophic collapse is considered a landmark event in crypto history. Later, the project team launched LUNA 2.0 to "start over," but honestly, once trust in the market is broken, it's very hard to rebuild. In cryptocurrency, consensus and confidence are everything—once this string snaps, there's little hope left.

Digging deeper into the technical side, the original Luna was tied to the UST stablecoin, which was not backed by actual assets but maintained its peg solely through a mint-and-burn mechanism with Luna. Sounds clever, right? But the 2022 crash proved that this algorithmic stablecoin logic is a ticking time bomb under extreme market conditions. When panic spreads and big players start selling off, it triggers a "death spiral"—the price falls, more sell-offs happen, and the downward trend accelerates. The key issue is that this fundamental flaw has not seen a real fix yet—who can guarantee history won't repeat itself?

The legal and regulatory risks have also been looming. Founder Do Kwon is wanted by multiple countries for suspected financial fraud, and a sentencing ruling is scheduled for December 11, 2025. The founder's legal troubles cast a huge shadow over the project's legitimacy. Plus, look at how regulators worldwide view algorithmic stablecoins—South Korea has classified them as high-risk investments, and related legislation is tightening in the US. One day, stricter trading restrictions might come into effect—who dares to gamble with such risks?

Lastly, let's consider the current market situation. Both LUNC and LUNA 2.0 are small-cap tokens with low market capitalization and liquidity. These kinds of tokens are most easily manipulated by whales or large traders, and retail investors often end up getting caught in the trap. The Terra ecosystem rebuild has been slow, and developers and users have largely abandoned ship. Now, looking at the stablecoin market, USDT and other compliant-backed stablecoins dominate, while Terra’s ecosystem has almost zero competitive strength. Occasional price rebounds are mostly short-term speculative moves, and a significant correction could follow at any time.

In essence, the risks associated with Luna tokens are not one-dimensional—they are the result of a combination of historical baggage, technical flaws, legal risks, and market weakness.