A toy model of the mechanism that held UST at a dollar: burn a UST, get a dollar’s worth of LUNA, sell it. With few people running, it works. With many, each further UST costs ever more new LUNA.
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From the book
Nobody Owns Money · Chapter 33
I Don't Debate the Poor
Next to this experiment in the chapter
For just such a case Terraform had a reserve fund, the Luna Foundation Guard, which that spring had bought up about 80,000 bitcoins, roughly $3 billion worth, to defend the peg. Within a few days the fund spent almost all those bitcoins, selling them into a falling market and dragging down bitcoin itself in the process. On May 9, when UST was already worth noticeably less than a dollar, Kwon wrote to his followers that they could listen to the doomers for the sixty-ninth time, or they could remember that all the doomers were now poor, and go for a run. A few days later Terra and LUNA, which a month earlier had been worth about $40 billion on paper, were worth nothing.