Terra Blockchain is currently on hold

On Thursday, Terraform Labs, the company behind the doomed network, sent an update indicating that the blockchain had been blocked at block height 7603700.

The network had been suspended to reduce the danger of governance assaults, according to the article.

According to a tweet,

“Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack.”

Terraform Labs later released a fix to prevent future delegations from taking place until validators restarted the network. It went on to say that the network will be reactivated once two-thirds of the voting power was online.

The news comes as Terra's UST stablecoin continues to battle to keep its dollar peg. The algorithmic stablecoin first fell below its intended price on Saturday, and it has remained below it all week.

Terra had a design feature that utilized LUNA to keep the price of UST stable while it was running.

When the UST price went below the peg, arbitrageurs could burn 1 UST to mint $1 worth of LUNA, or burn $1 worth of LUNA when the UST price rose above $1.

However, due to the current market conditions, UST has been under increased selling pressure this week. As a result, LUNA fell and went into a death spiral as UST holders scrambled to get out of their holdings.

As a growing number of UST holders began to mint more LUNA, the supply skyrocketed, eventually surpassing 25 billion tokens.

This lunchtime, LUNA fell below one cent. It was trading near $80 just a week ago.

The cost of attacking the network has fallen considerably as the price of LUNA is now essentially heading near zero.

The blockchain now has a market capitalization of little over $400 million. The network was valued around $30 billion whereas LUNA was around $80.

The wipeout this week has been termed as a once-in-a-lifetime occurrence unlike any other in crypto history.

Although several algorithmic stablecoin ideas have failed in the past, including the Basis Cash project that Terraform Labs CEO Do Kwon is said to have assisted in the development of, none have had as dramatic a rise and fall as Terra.

Terra, formerly one of the world's largest Layer 1 blockchains, alongside Solana, Avalanche, and Ethereum, has become one of crypto's most dramatic disasters in just a few weeks.