Terra saw one of the largest crashes in crypto history this week, prompting the network pauses. The Terra network’s algorithmic stablecoin, UST, is critical.
As the network’s death spiral continues, the circulating supply of LUNA tokens has surpassed 6.5 trillion. Terra has restarted its block production.
After two interruptions, the Terra network is once again creating blocks. LUNA, on the other hand, has dropped to around zero cents.
Second reboot in 24 hours
For the second time in 24 hours, the Terra network has rebooted.
Terraform Labs, the company behind the troubled Layer 1 network, released an update on Friday verifying that Terra was once again creating blocks.
“Block production on the Terra blockchain has restarted. On-chain swaps have been disabled by validators, and IBC channels have been closed. Users are urged to connect their local chains to off-chain assets like bETH.”
Terra validators shut down the network at 7607789 block height on Friday morning. It had also been suspended a few hours prior, at a block height of 7603700, but was quickly restored.
When 2/3 of the network’s validators came online, a patch was deployed to disable delegations, and the network was relaunched.
“Debating a new Terra”
While the Terra community has declared the network to be nearly dead, there are whispers of a plot to resurrect it in a new form.
Early Friday, a developer using the handle @stablechen on Twitter said the community was “debating a new Terra” that would either restore the network to a pre-meltdown state, delete Terraform Labs, or construct new tokenomics models for UST and LUNA.
The network’s LUNA token began to fall after UST lost its peg to the dollar last weekend. Because of the link between the two tokens, this is the case.
The network was valued at $30 billion last week, with only 340 million tokens in circulation.
Users can burn UST for $1 worth of LUNA, which is designed to encourage arbitrage and help UST return to its peg (on the other hand, users can make a premium by burning LUNA when UST trades over $1).
Holders attempted to exit their positions en masse this week as UST lost its peg due to a series of large-scale transactions.
As a result, LUNA experienced hyperinflation and rapidly lost value, creating a death spiral scenario. It has dropped by 99 percent in the last several days and now effectively trades at nothing.
The network has grown far more vulnerable to governance attacks as a result, which is why it was suspended on Thursday. The LUNA supply has surpassed 6.5 trillion units, yet UST is barely worth $0.10.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2022/05/15/terra-to-restarts-blockchain-as-luna-crumbles-to-the-ground/