Quick take:
- The Terra blockchain has been halted by its team
- Terra Validators have decided to stop the Terra Chain to prevent governance attacks
- Such attacks have become cheaper given LUNA’s ongoing price drop and inflation
- Over 15 billion LUNA coins have been issued today
- Binance, Bybit, and Bitmex have delisted futures contracts related to Terra (LUNA)
The team at Terra (LUNA) has announced via Twitter that they will be halting the blockchain at block height 7603700. Terra validators made the decision as a means of preventing governance attacks as a result of LUNA’s ongoing inflation and the significantly reduced cost of such attacks on the network.
At the time of writing, the ‘validators are applying a patch to disable further delegations, and they will coordinate to restart the network in a few minutes.’
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 and a significantly reduced cost of attack.
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) May 12, 2022
15 Billion Terra (LUNA) Issued in One Day
According to the team at WuBlockchain, more than 15 billion LUNA have been issued today, thus leading to a total supply of 18 billion. The resulted inflation has resulted in the price of LUNA dropping to a local low of $0.00354. To note is that Terra (LUNA) hit its all-time high of $119 less than two months ago, on April 5th, 2022.
According to Terra Analytics data, more than 15 billion LUNAs were issued today, the total supply has exceeded 18 billion, and the price of LUNA has fallen below $0.02. The current total UST supply is 12 billion. https://t.co/5OTYrjtsBe
— Wu Blockchain (@WuBlockchain) May 12, 2022
Binance, Bybit, and Bitmex Delist Terra (LUNA) Futures Contracts
The inflation surrounding LUNA is part of the balancing aspect designed to help TerraUSD (UST) maintain its $1 peg. Every time $1 worth of UST is minted, a similar value in LUNA is destroyed. So when the price of UST drops below the $1 peg, traders burn UST to remove it from circulation, consequently reducing its supply and creating demand. The burning of UST involves the issuance of LUNA. In this case, the creation of Terra (LUNA) to correct UST’s massive depegging has caused the ongoing inflation and price drop of the latter digital asset.
LUNA’s woes in the crypto-markets have further been compounded by the three crypto exchanges of Binance, Bybit, and Bitmex delisting its perpetual contracts.
Earlier today, Binance announced that it was delisting the coin-margined LUNA perpetual contract. Furthermore, the exchange has revised its leverage and margin tiers to reflect the current market conditions. Additionally, Bybit also announced today that it delisted the LUNA/USD reverse contract. The crypto exchange of Bitmex also followed a similar path by delisting the LUNAUSDT and LUNAUSD perpetual contracts on the platform.