LUNA's collapse exposed the defects of algorithmic stablecoins. If there is a systemic risk in U.S. Treasury bonds, USDC may also depreciate severely! 1. Defects of algorithmic stablecoins exposed by the collapse of LUNA: LUNA and UST maintain price stability through algorithms, but LUNA, as a volatile asset, cannot stably support the value of UST, and over-rely on the Anchor protocol, forming a single fragile ecosystem. When the market fluctuates sharply, such as large investors selling UST, UST depreciates, which in turn leads to oversupply of LUNA. The two drag each other to form a death spiral and eventually collapse, which reflects the defects of algorithmic stablecoins in mechanism design and ecological dependence. 2. The impact of systemic risks of U.S. Treasury bonds on USDC: Most of the reserve assets behind mainstream stablecoins such as USDC are short-term U.S. Treasury bonds. If there is a systemic risk in U.S. Treasury bonds, such as U.S. debt/GDP exceeding 100%, intensified fluctuations in long-term interest rates, and rising credit risks of U.S. Treasury bonds themselves, the value of USDC reserve assets will be directly damaged. In addition, if a stablecoin run occurs, the issuer's selling of U.S. bonds may disrupt the global bond market, trigger chain financial turmoil, and further weaken the value stability of USDC.