Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
Terra’s validators stopped the blockchain to prevent a government attack in response to LUNA’s steep drop.
The blockchain Earth has been halted on Thursday amid a massive drop for the ecosystem’s native currencies.
Terraform Labs the development company behind the project, published an update confirming that the Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. was halted at the level of block 7,603,700. According to the publication, the move has been taken to mitigate the risk of a possible governance attack in the wake of the steep price loss of the native cryptocurrency, LUNA.
The LUNA token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. went from a price of USD $80 to less than 5 cents this week, as USD Terra (UST), the algorithmic stablecoin of Earth lost its parity with the dollar. LUNA has fallen to as low as USD $0.016 by the time of publishing, according to data from Coinmarketcap .
The levels are too low to ” prevent government attacks “ said the organization in a tweet citing the most recent LUNA inflation. The governance token of Earth is tied to UST in a mint and burn mechanism to guarantee its USD$1 price (which has now shown its flaws).
Terra’s validators have decided to stop the Terra network a network refers to all nodes in the operation of a blockchain at any given moment in time. to prevent governance in the world of cryptocurrencies, governance is defined as the people or organizations that have decision-making powers regarding the project. attacks following a severe inflation and a significantly reduced cost of attack .
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 a general increase in prices and fall in the purchasing value of money. and a significantly reduced cost of attack.
— Terra (UST) ???? Powered by LUNA ???? (@terra_money) May 12, 2022
Terra faces unprecedented difficulties
In a tweet subsequent, the team of Earth network validators are “ applying a patch to disable more delegations and will coordinate to restart the network ” in brief. The last update signals that a patch has already been deployed.
Proxies will be deactivated once block a file containing information on transactions completed during a given time period. Blocks are the constituent parts of a blockchain. production resumes. The network should go live once 2/3 of the voting power is online. An update will be provided accordingly.
The momentary pause of the blockchain means that transactions with UST, LUNA or other currencies based on UST, LUNA or Earth are disabled. Holders of these tokens will have to wait for the blockchain to be restarted to send, receive, mint or perform any kind of transaction over the network.
The move comes at a historic and unprecedented time for the digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currency currency is a medium of exchange that defines value. space. Since last weekend, UST has been showing volatility, which is a phenomenon that contradicts its stable nature. The asset is expected to maintain a price equal to the US dollar, but that hasn’t been the case these days. On Wednesday of this week, UST reached 33 cents.
Earth created a mechanism that LUNA uses to stabilize the price of UST. Investors can burn 1 UST to mint LUNA worth USD $1 when the UST price falls below the fixed level; or burn LUNA worth USD $1 when the UST price trades above the expected level. However, UST experienced intensified selling pressure this week amid adverse market an area or arena, online or offline, in which commercial dealings are conducted. conditions. As a result, LUNA also collapsed, prompting investors to exit their positions.
As an increasing number of UST holders began to mint more LUNA, supply increased dramatically. Although not enough to bring parity back to the stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. . Terraform Labs and its founder, Do Kwon, have coordinated efforts to restore stability to the currency. including an increase in LUNA’s minting capacity and a coordinated burn of 11% of the UST supply. Rescue measures are on the way, but will they be enough?
- BlackRock and Citadel reject conspiracy theories, deny being behind UST collapse
- Prior to UST, Do Kwon created another stablecoin project that also failed: report
- Terra founder Do Kwon announces plan to save UST as LUNA slips 90%.
Article by Hannah Estefania Perez / DiarioBitcoin
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