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After the collapse of the native LUNA token and the UST algorithmic stablecoin, Terra’s validators stopped the blockchain for the second time in a day. The step was explained by the need to develop a “recovery plan” for the network.
The Terra blockchain has officially halted at block 7607789.
Terra Validators have halted the network to come up with a plan to reconstitute it.
More updates to come.
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) May 13, 2022
On May 12, validators were already shutting down the network in order to prevent “governance attacks” that were made possible by the dramatic depreciation of LUNA. Work was resumed on the same day, with the delegation function disabled.
This time, Terraform Labs did not say what measures the company is going to take to remedy the situation. The initiatives presented earlier did not save the ecosystem assets from almost complete depreciation.
On May 10, UST lost parity with the US dollar – the stablecoin was unable to return the peg. At the time of writing, it is trading near $0.13, according to CoinGecko.
The LUNA cryptocurrency, which is used to issue UST, has fallen in price by almost 100% over the past seven days. Back on May 6, the asset was worth over $80 — at the time of writing, its price is $0.000059 (Binance).
LUNA/BUSD hourly chart exchanges Binance. Data: Trading View.
One of the measures proposed by the developers involved expanding the base pool of LUNA and increasing the emission of cryptocurrency. This supposedly would allow the required amount of UST to be withdrawn from circulation more quickly.
The activation of the offer led to the fact that the amount of LUNA in circulation exceeded 6.5 trillion coins. The UST offer is valued at 11.3 billion, according to SmartStake.
After the decline in the price of the native Terra token, cryptocurrency exchanges began to curtail operations with the asset. On May 12, Binance delisted LUNA perpetual contracts settled in the underlying asset.
On May 13, the platform removed almost all trading pairs with LUNA and UST from the spot market. The exchange has allowed users to sell assets for BUSD.
Binance will remove and cease trading on the following spot trading pairs at 12:50am UTC, May 13:
Binance will remove and cease trading on the BUSD-Margined Perpetual Contract: LUNA/BUSD trading pair at 1:30am UTC, May 13.
— Binance (@binance) May 13, 2022
After decision online trading platform recorded a large influx of LUNA to Korean exchanges.
More than 2 billion #LUNA flowed into Korean exchanges after Binance decided to delist LUNAhttps://t.co/B5aaaAcP1K
— 8BTCnews (@btcinchina) May 13, 2022
Official team statement on the Chainlink LUNA/USD Price Feeds situation pic.twitter.com/EjA5naYalu
— ChainLinkGod.eth (@ChainLinkGod) May 13, 2022
The Venus Protocol landing page reported a loss of $13.5 million. Chainlink oracles are configured to prevent them from displaying a LUNA price below $0.1 (the actual cost at the time was around $0.01 ). Attackers took advantage of this — they contributed millions of tokens to the platform, using them as collateral.
— DefiMoon 🦇🔊 (@DefiMoon) May 12, 2022
Recall, journalists CoinDesk has learned that Do Kwon was one of the anonymous co-founders of the failed algorithmic stablecoin Basis Cash.
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