Yeah I was holding some Luna. An amount that I was comfortable losing, but still. My Luna was staked. It was clear what was happening early on and I couldn't do anything since it takes so long to unstake it. I'm probably done staking things for a while. The rewards are peanuts and the inability to access your assets can be a large price to pay.
The people who really lost were the people who were holding UST. There were *a lot* of people who basically put their savings account into UST to get the 20% rewards. I never in a million years wanted to hold UST, and maybe that was a sign that I shouldn't have been buying Luna. But I was sold on the idea that other people highly valued a decentralized stable coin. I'm pretty new to picking individual assets in investing, and I think my main lesson to learn here is don't try to bet on things that I don't particularly care about but that I think that other people do care about.
They are completely different. USDC has a supposedly has a dollar in a vault for each coin minted. Proponents of decentralization argue that you have to trust the people behind USDC and argued that was the downside compared to UST. Personally, if I were to be holding a stable coin, USDC is the one I'd want to hold.
UST was an algorithmic stable coin. On Terra, there was a mechanism where you could destroy $1 worth of LUNA to get 1 UST, and vice versa. You could destroy 1 UST to get $1 worth of LUNA. So the idea is that if the price of UST went over $1, then you could swap $1 of LUNA for UST and sell the UST at a price over $1 to make a profit. If the price drops below $1, you buy the UST for less than a dollar and swap it for $1 of LUNA. Supply of UST goes down which increases the price of UST (and LUNA supply went up which decreases the price of LUNA).
So the theory was that arbitrage opportunities will balance the price of UST. But, as I understand it, UST was getting dumped so fast that there wasn't enough throughput on the Terra system to arb it fast enough.