Terra Blockchain Is Now Officially Halted! What Can LUNA Investors Do Now?

Terra Blockchain Is Now Officially Halted

Terraform Labs, the firm behind the LUNA token and stablecoin UST, has announced that the Terra blockchain has officially halted following the dramatic crash of LUNA price and UST peg this week. This hurtful event has driven the whole crypto market into the red, with no signs of recovery in sight.

After the block height of 7607789, no new blocks were formed on the blockchain network, and holders couldn’t move their Terra assets until the blockchain was unfrozen.

“The Terra blockchain has officially halted at block 7607789. Terra Validators have halted the network to come up with a plan to reconstitute it. More updates to come,” the company tweeted.

Do Kwon, CEO of Terraform Labs, has revealed his plan to help the stablecoin UST recover its dollar peg.  Because of the way stablecoin mechanics operate, Kwon realized that the amount of capital seeking to leave UST has resulted in a lot of selling of LUNA.

“Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before UST can start to repeg. There is no way around it,” he said on Twitter.

He’s supporting a proposal from the community to boost the quantity of LUNA minted every day. More UST holders would be able to cash out as a result.

“Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST,” he said.

LUNA tokens serve as Terra network’s reserve fund, supporting the network’s stablecoin UST. The ecosystem keeps UST peg by minting and burning LUNA, to put it another way, the stability of UST is highly dependent on the stability of LUNA.

However, UST has dropped off its peg due to a sharp drop in the price of LUNA. LUNA is now trading at $0.0079, down over 98.27% in the last 24 hours, according to CoinCu data. This is one of the most impressive large-cap token sell-offs we’ve witnessed this year, and it signals many serious concerns about the collapse of the whole Terra ecosystem and its stablecoin.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Hazel

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