Faced with the threat of a potential governance attack, Terra validators have decided to paralyze the network while they devise solutions to stay afloat.
Terra Money’s Twitter account has reported that the Terra blockchain has been taken offline as a protective measure amid the current tension in the crypto market.
The sharp drop in the value of this cryptocurrency, which is currently trading at $0,00006 per unit, has opened a new attack vector for the Terra blockchain. The blockchain developers indicated that the massive minting of LUNA in the last 24 hours and the significant reduction in its price on the market, makes Terra vulnerable to a governance attack.
The network's validators have therefore decided to permanently stop the blockchain. This will give developers time to come up with new strategies and solutions to stay afloat and get UST, their flagship stablecoin, trading at $1 again.
In this latest tweet published so far, the Terra developers indicate that the measure of stopping the network to avoid the risk of a possible attack is official, although in the last few hours, Terra has been paralyzed on two occasions.
The first of these occurred at block height 7.603.700, with the aim of implementing a software update to disable delegations, as seen in the tweet. Another of the security measures that the network developers had implemented to protect Terra was the addition of 240 million LUNA to staking.
It may interest you: The plan to save UST and LUNA
Terra halts its transactions
The network shutdown means that the blockchain cannot produce new transactions. Therefore, LUNA and UST users cannot trade these cryptocurrencies on the blockchain until further notice.
This action, in addition to minimizing the possibility of a governance attack, also seeks to give developers time to design and implement new solutions that will allow UST to recover its value.
Via social media, Terra developers announced a contingency plan to save UST. Terra outlined two proposals, #1164 and #1188, which are currently being voted on by the crypto community. These proposals aim to increase UST burning and, with it, increase LUNA minting.
The first proposal, #1164, has 62% of the votes in favor, while the second, #1188, has almost 100% of the votes. However, voting on both proposals ends next week.
Over 6,5B LUNA in circulation
The circulating supply of LUNA has increased significantly on Thursday. In the past 24 hours alone, more LUNA has been minted than in the entire existence of the blockchain network.
The amount of LUNA circulating in the market was about 340 million units earlier this month. The market supply of this cryptocurrency currently exceeds 6,5 trillion units, according to verified data from the CoinMarketCap platform.
Source: CoinMarketCap
If proposal #1188 passes, it could spell doom for LUNA. Burning the nearly 1.400 billion UST that the proposal calls for would create a similar amount of the cryptocurrency on the market, further collapsing its price. In fact, in the submitted proposal, the developers indicate that burning UST will reduce the pressure on the stablecoin’s peg, but at the cost of LUNA’s price.
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