Terra blockchain validators have opted to officially suspend network operation. The move intends to deter governance attacks following the substantial devaluation of the network’s LUNA token.
Terraform Labs is no longer confident that it can prevent governance attacks. That is after the price of LUNA fell by more than 99*. In other words, the price drop “significantly reduced [the] cost of attack,” according to a tweet from the ecosystem operator.
Unexpected turn of events for Terra blockchain network
The blockchain network halted at a block height of 7,603,700, according to Terraform Labs’ official Twitter handle, following a series of dramatic events that produced an unprecedented drop in the price of LUNA and its related TerraUSD (UST) stablecoin.
The stablecoin existed to maintain algorithmic parity with the US dollar. However, it lost its peg earlier this week and fell below $0.30.
The disruption in Terra blockchain production, however, was short-lived, with Terra later declaring that the network will be restarted once validators applied a patch to prevent additional delegations.
“The network should go live once 2/3 of the voting power comes online,” they said.
LUNA/USDT delisted
On Thursday, Binance delisted LUNA/USDT contracts after the trading pair fell below 0.005 USDT. Huobi, a cryptocurrency exchange, had delisted LUNA tokens the day before.
Do Kwon, co-founder of Terraform Labs, released details regarding a recovery strategy earlier this week, which would help safeguard the UST peg from further depreciation. On Thursday, Terra’s official Twitter handle elaborated on those ambitions, laying out a scheme to burn $1.4 billion UST and stake 240 million LUNA. The details of the rescue plan, however, have failed to deter market sell pressure.
Terra LUNA was a top 10 cryptocurrency project by market capitalization before the events of this week. Its UST asset was the third-largest stablecoin after Tether (USDT) and USD Coin (USDC).