The Terra blockchain has been halted by developers at a block height of 7603700, according to a Twitter announcement. The halt will stop all transactions on the network.
The move is meant to prevent governance attacks following severe LUNA inflation. The circulating supply of the token has swelled to 3.45 billion tokens, according to CoinMarketCap data. Such massive inflation has significantly reduced the cost of potential attacks. Now that the governance token has become incredibly cheap, bad actors can potentially scoop up a large number of tokens in order to gain control of the network.
As reported by U.Today, the token recently plunged below one cent, erasing tens of billions of dollars worth of value in days.
The UST stablecoin is currently sitting at $0.40, struggling to regain its peg despite the massive increase in LUNA's circulating supply.
Earlier today, Fitch Ratings warned that Terra's collapse would accelerate calls for regulation.
UPDATE (4:38 p.m. UTC): Terra validators are preparing to restart the network after applying a patch in order to disable further delegations, according to an update posted by the project's official Twitter account.
UPDATE (6:03 p.m. UTC): Terra has resumed block production.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.