The Terra blockchain shut down for a second time on May 13 after its validators, users who tend its blockchain, pulled the plug.
“Terra blockchain has officially halted at the block height of 7607789,” Terra Daily tweeted. “Team validators have temporarily paused the network to come up with a plan for reconstituting it.”
Meanwhile, the collapse of Terra’s ecosystem has prompted several leading centralized exchanges to delist LUNA and UST pairs, including Binance, Bybit, and BitMEX. Binance has also suspended all deposits and withdrawals for the Terra network.
Governance Attack
The news came eight hours after the blockchain resumed block production; it was paused for two hours on May 12. Terra had halted the network fearing a potential governance attack following the aggressive inflation of its network token, LUNA, which was triggered by Terra’s native stablecoin UST losing its peg.
The peg was purportedly maintained by a mechanism allowing UST holders to redeem their stablecoins for Terra’s network token LUNA. The UST bank run has caused LUNA’s circulating supply to balloon to more than 6.5 trillion tokens, with LUNA last trading hands for $0.00001746. As such, the team feared that someone could purchase a large stash of tokens for cheap and delegate them to a malicious validator in an attempt to steal the project’s remaining assets.
LUNA posted an all-time high of $119 roughly six weeks ago. The total value locked on the Terra network has also plummeted to $844M roughly ten days after sitting at $30B.
The fallout from Terra’s has been extreme. The Korean news outlet Money Today reported that Terra founder, Do Kwon has requested assistance from police after an individual allegedly broke into his apartment in Seoul.
Stories claiming that eight individuals have committed suicide after losing their life savings to the Terra debacle went viral on social media, however The Reporter Times said that an investigation into the claims found them to be false.
