Technology

The LUNA and Terra USD network has been paralyzed

Key facts:
  • Terra cryptocurrencies continue to trade on some centralized exchanges.

  • The decision was made after a massive issuance of LUNA, in order to prevent governance attacks.

The Terra network, where the terra (LUNA) and terra USD (UST) cryptocurrencies are processed, was paralyzed minutes ago, at block 7,603,700.

The event occurred, as reported by Terra from its official channels, after a validators decision of the network in order to prevent governance attacks.

This occurs after, as CriptoNoticias reported this morning, UST holders massively burned (destroyed) their coins, with the consequent issuance of LUNA. To understand this, keep in mind that for every UST that is burned, an equivalent amount of LUNA is emitted.

Luna is the governance currency of Terra and is considered to, had the blockchain not been paralyzed, attacks on the protocol could have occurredsince its possession grants voting power in decisions about the network.

Although movements of the tokens of that network cannot be made on the block chain, both cryptocurrencies continue to be listed on some centralized exchanges. At the time of publication of this article, the price of UST (thought of as a stablecoin) is $0.36 and the price of LUNA is $0.016.

moon market quote
UST, which is thought to be a stablecoin, has lost parity with the US dollar and its price continues to fall. Source: CoinMarketCap.

According to Terra, validators are applying a patch with the aim of disabling delegations (that is, addresses that are not validators can vote or make proposals). Validators “will coordinate to restart the network in a few minutes,” add the Twitter post.

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