LUNA is a cryptocurrency that was originally part of the Terra blockchain ecosystem. It was designed to support stablecoins, which are digital currencies pegged to real-world assets like the US dollar. LUNA played a crucial role in maintaining the stability of these stablecoins by adjusting its supply based on demand. In May 2022, LUNA experienced a significant collapse, leading to a loss of value and raising concerns about the stability of the Terra network. This event highlighted the risks associated with algorithmic stablecoins and prompted discussions about regulatory measures in the cryptocurrency space.