Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

The Terra Blockchain Has Been Halted

By Crypto BriefingCryptocurrencyMay 13, 2022 01:20AM ET
www.investing.com/analysis/the-terra-blockchain-has-been-halted-200624131
The Terra Blockchain Has Been Halted
By Crypto Briefing   |  May 13, 2022 01:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Terra validators halted the failed blockchain at a block height of 7603700.

Key Takeaways

  • Terra validators have halted the blockchain in response to the ongoing LUNA and UST crisis.
  • Due to UST losing its peg to the dollar, LUNA has entered a death spiral. It broke below one cent today.
  • Terra says that the network will be restarted when 2/3 of the voting power comes online. However, after this week, the project's future is up in the air.

The development follows LUNA’s death spiral and crash below one cent.

Terra Blockchain on Pause

The Terra blockchain is on standstill.

Terra Tweet
Terra Tweet

Terraform Labs, the development company behind the ill-fated network, posted an update late Thursday confirming that the blockchain was halted at a block height of 7603700. The post explained that the network had been paused to mitigate the risk of governance attacks.

A tweet read:

“Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack.”

Terraform Labs later shared a patch to disable further delegations ahead of validators restarting the network. It added that the network would be restarted when 2/3 of the voting power comes online.

LUNA/USDT Chart
LUNA/USDT Chart

LUNA/USDT (Source: TradingView)

The update comes as Terra’s UST stablecoin continues its struggle to maintain its peg to the dollar. The algorithmic stablecoin first dropped below its intended price Saturday and has failed to return to its peg throughout this week. When it was running, Terra incorporated a design mechanism that used LUNA to stabilize the price of UST. Arbitrageurs could burn 1 UST to mint $1 worth of LUNA when the price UST price fell below peg or burn $1 worth of LUNA when the UST price traded above $1. However, UST experienced intensified selling pressure this week amid adverse market conditions. As a result, LUNA also crashed and entered a death spiral as UST holders rushed to exit their positions. As an increasing number of UST holders started to mint more LUNA, the supply dramatically increased, breaking above 25 billion tokens today. LUNA broke below one cent this afternoon. Just a week ago, it was trading closer to $80.

As the price of LUNA is now effectively trending toward zero, the cost of attacking the network has dramatically decreased. The market cap for the blockchain now sits at just over $400 million. When LUNA was worth $80, the network’s value was about $30 billion.

This week’s wipeout has been described as an unprecedented event unlike any other in crypto history. Although many algorithmic stablecoin projects have failed in the past, including the Basis Cash project that Terraform Labs CEO Do Kwon allegedly helped create, none have had as much of a dramatic rise and fall as Terra. Once one of the world’s biggest Layer 1 blockchains alongside the likes of Solana, Avalanche, and Ethereum, in the space of a few weeks, Terra has become one of crypto’s most spectacular failures.

Update: As of approximately 18:00 UTC today, the Terra blockchain had resumed block production.

Original Post

The Terra Blockchain Has Been Halted
 

Related Articles

Crypto Briefing
Uniswap Passes $1 Trillion In Trading Volume By Crypto Briefing - May 25, 2022

The popular DeFi exchange surpassed the landmark trading volume in just under four years. Key Takeaways Uniswap has surpassed $1 trillion in cumulative trading volume. Three and a...

The Terra Blockchain Has Been Halted

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email