In order to prevent any possible governance attacks following the monumental drop in the LUNA price, the Terra blockchain has been temporarily shut down. The decision was made by the majority of the network’s validators with the support of Terraform Labs, and includes a patch to disable staking options once the blockchain is restarted.
Terra blockchain officially paused
Following the collapse of the UST and its token LUNA, the Terra blockchain has been temporarily paused to prevent any governance attacks.
The Terra blockchain was officially halted at a block height of 7603700.https://t.co/squ5MZ5VDK
Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack.
– Terra Powered by LUNA (@terra_money) May 12, 2022
The decision was made by a majority of validators with the support of Terraform Labs, to restart the blockchain once updated with a patch that will temporarily pause the staking functions.
With the LUNA price currently dramatically low, a governance attack could effectively put the entire blockchain at risk.
This being the case, it remains to be seen what solutions will be undertaken alongside this new announcement. Do Kwon, the founder of Terra, has not given any news since yesterday, when he announced via a tweet that he was looking for solutions to rebalance LUNA and UST between them, which are now both in a downward spiral.
At the time of writing, the UST is trading at $0.35 (down from $1), and the LUNA is trading at $0.01, showing a frightening -100% across all time scales.
Note that the blockchain was notably paused following a tweet from the Lido protocol yesterday, which mentioned this very possibility of attack:
“Currently, [Editor’s note: 3:32pm, May 11] Terra’s economic security has been briefly valued at about $180 million, with over $200 million in bETH on Terra. It is theoretically possible to shut down the network and freeze these assets in an elaborate economic attack. “
Whatever the case, all eyes are now on UST and LUNA, both of which were still in the top 10 cryptocurrencies in terms of market capitalization just a week ago.
Update: 12/05 – 7:15pm]
Terra has released the patch in question on the GitHub development platform.
The announcement was accompanied by the following tweet:
“Delegations will be disabled as soon as block production resumes. The network should be operational as soon as 2/3 of the votes are online. An update will be provided accordingly “
Update: 13/05 – 09:25]
Overnight, at 4:13am, the Terra blockchain went down again at block 7607789.
” Terra validators have shut down the network in order to find a plan to rebuild it. More updates to come.”
