Wednesday, December 6, 2023

Terra Halts Its Blockchain To Prevent Attacks As LUNA Crashes To Zero

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Terra halts its blockchain to prevent attacks after the LUNA token crashed to zero, down from over $80 a week ago as the validators are taking extreme measures to protect the network so let’s read more today in our latest Blockchain news.

The Terra validators chose to halt the blockchain network after the week’s collapse of both LUNA and UST. Validators planned to restart the network after applying the patch to avoid potential attacks. After Terra’s UST stablecoin lost the US peg, the company’s LUNA crypto started crashing. Today, after shedding almost 100% of the value over the past week, Terra validators said they will halt the blockchain.

Terra halts its blockchain according to its official account, the validators chose to do so to prevent governance attacks after severe LUNA inflation and reduced the cost of the attacks. In other words, given the dramatic situation with LUNA’s price, the blockchain network rapidly became more susceptible to attackers.  In another tweet, Terra wrote that it will be like a temporary outage:

“Validators are applying a patch to disable further delegations, and they will coordinate to restart the network in a few minutes.”

The developers announced roughly an hour later that the blockchain resumed block production with staking on the network disabled:

 “Delegations are disabled now that the chain is live with the new code merge.”

LUNA sits at a price of over $0.01 per coin, the data from CoinGecko shows that there was a fall from a price point of over $81 a week ago. This is a 99.9% fall over the past week but most of the decline occurred in the past three days alone. Terraform labs as the creator of Luna and UST unveiled a lot of steps aimed at salvaging the ecosystem after the collapse of the coins. Terraform Labs said that it will burn any remaining UST in the community pool to burn UST which is running on ETH and stake $240 million worth of coins and avoid potential attacks. The move to stop the blockchain is similarly designed to avoid such attacks.

The crypto industry observers and insiders offered quite the negative takes on the announcement and Twitter users even see the move as a little bit problematic. One Twitter user noted:

“Their plan is to let hyperinflation of Luna dissolve the bad UST debt, but the chain security of Luna goes down as hyperinflation reduces its price. So the chain is not even safe enough to continue their plan for recovery?”

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