At 12:14 p.m. (ET), the Twitter account operated by the Terra team announced that the Terra blockchain network had been halted. According to the Terra developers’ tweet, Terra validators needed to apply a patch to further disable delegations.
** This post was updated at 3:00 p.m. (ET) to reflect the fact that the Terra blockchain has resumed block production.
Terra Blockchain Halts in Order to Prevent Governance Attacks, Team Says Restart Coming Soon
At the time of writing, the Terra blockchain has stopped block production since the mid-afternoon Eastern Standard. The team’s Twitter account addressed the public by saying: “The Terra blockchain was officially halted at a block height of 7603700. Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack.”
On May 12, 2022, Terra’s native token LUNA dropped to an all-time low of $0.00825774 per unit. The once-stable coin terrausd (UST) has been quite volatile and has seen a 24-hour price range between $0.842598 to $0.315279 per coin. UST which was once a top ten coin, is now ranked 25, while LUNA was also a top ten coin and is now ranked 112 among 13,419 cryptocurrencies.
Following the update, the Terra team explained a patch was in the works to reboot the network. “Validators are applying a patch to disable further delegations, and they will coordinate to restart the network in a few minutes,” the team tweeted. Nine hours prior, the Terra team explained that the system was feeling intense pressure.
“The prevailing peg pressure on UST from its current supply overhang is rendering severe dilution of LUNA,” the team said. “The primary obstacle is expelling the bad debt from UST circulation at a clip fast enough for the system to restore the health of on-chain spreads. To expedite this goal, several measures are being taken. First, the current Prop 1164 will expand the base pool size and accelerate the burn rate of UST – helping deflate on-chain spreads.”
The Terra team added:
TFL is also initiating three more emergency actions: 1. Proposal to burn the remaining UST in the community pool. 2. TFL will burn the remaining 371 million UST cross-chain on Ethereum. 3. TFL just staked 240 million LUNA to defend from network governance attacks.
Following the patch update, the team explained that the patch release codebase was available and further said: “Delegations will be disabled once block production resumes. The network should go live once 2/3 of the voting power comes online. An update will be provided accordingly.”
The Terra chain has been in the limelight for a few weeks now, since the project’s team started stacking large quantities of bitcoin (BTC) to defend the UST peg. While the media was once positive, similar to Terraform Labs’ backers, the stories concerning the Terra ecosystem today have been nothing short of negative.
**Since this post was published, the Terra team announced that block production has resumed. “The Terra blockchain has resumed block production. Delegations are disabled now that the chain is live with the new code merge,” the team tweeted. “Validators, please check the Discord announcements for the latest patch notes.”