Terra Blockchain Officially Ceases Operations After LUNA Price Crash

Validators on the Terra blockchain have decided to officially cease network activity on Thursday, a move aimed at preventing a governance attack following a severe devaluation of the network’s LUNA token.

The official Terraform Labs Twitter account has confirmed that the blockchain network stopped at block height 7,603,700. This follows a series of dramatic events that led to an unprecedented drop in the price of LUNA and its associated stablecoin, TerraUSD (UST). The stablecoin lost its peg to the U.S. dollar earlier this week before falling below $0.30. The stablecoin is designed to maintain a one-to-one peg to the U.S. dollar.

With the price of LUNA plummeting more than 99%, Terraform Labs is no longer confident that it can prevent governance attacks. In other words, the price drop "significantly reduces the cost of attack," the ecosystem operator tweeted Thursday.

However, the halt in block production didn’t last long, with Terra then announcing that it would restart the network once validators apply a patch disabling further delegations. "Once 2/3 of the voting power is live, the network should be live," they said.

According to Cointelegraph, after the LUNA/USDT contract fell to 0.005 USDT, it was delisted by Binance on Thursday. The day before, cryptocurrency exchange Huobi delisted the LUNA token.

Earlier this week, Terraform Labs co-founder Do Kwon shared details of a recovery plan that will help UST avoid further devaluation. On Thursday, Terra’s official Twitter account further elaborated on these plans, proposing a strategy to burn $1.4 billion in UST and $240 million in LUNA. However, the details of the rescue plan failed to curb selling pressure in the market.

Before this week’s events, Terra’s LUNA was a top-10 cryptocurrency project by market capitalization, and its UST asset was the third-largest stablecoin behind Tether (USDT) and USD Coin (USDC).

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