Terra says it has paused its blockchain for the second time in 24 hours, with its native token LUNA and stablecoin UST in freefall. LUNA token is already down by more than 99.9% in 3 days. Billions of dollars are wiped out from investors in this freefall of prices.
This is the second time within hours that the blockchain has been halted. At block 7607789, the Terra blockchain officially stopped mining. According to a recent tweet, Terra Validators have suspended the network in order to devise a plan to rebuild the blockchain.
Terra halted blockchain initially on May 12 due to concerns that it had become vulnerable to attack. At 2:05pm ET, Terra developers stated that block production had restarted, although with staking disabled. The earlier move was due to concerns that the network could be attacked for a relatively low cost.
“Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack,” said the official Terra account on Twitter.
Terra’s issue began when its algorithmic stablecoin UST became de-pegged from the US currency. According to Binance data, it is presently trading around $0.005733, despite frantic efforts to restore the peg by issuing massive amounts of LUNA.
On May 9, 2022, the UST token was devalued, falling from $1 to $0.68. It was uncertain at the time of writing whether UST will resume its peg. When UST started trading significantly below its dollar peg, users began exchanging UST for other stablecoins, eventually dwindling the UST Curve pool. Short selling caused the price of LUNA, the collateral for UST, to fall. Terra was required to mint more LUNA in order to alleviate the downward pressure on prices.
LUNA delisted on binance
On May 12, Binance announced the suspension of perpetual contracts on the LUNA/USDT pair after lowering the authorized leverage to 8x.
Just hours following the previous news, Binance announced that it would be deleting cross and isolated margin pairings, spot trade pairs BUSD margined perpetual contracts on LUNA, thus saying goodbye to the much-hyped cryptocurrency.