All economic activity on the Terra blockchain has ceased
Exchanges are beginning to halt trading, as the future of the Terra assets remains uncertain
Just hours after halting and then restarting the Terra blockchain, validators appear to have thrown in the towel, deciding for a second — and this time indefinite — halt, late Thursday. Major exchanges soon opted to delist the LUNA token, a move that signals the end of the project in its current form.
Earlier Thursday, the community acted to protect assets from a malicious governance attack, including the bonded ether, AVAX, ATOM and SOL locked in the Anchor Protocol, which retain their value. In light of the chain halt, the Anchor team asked its users via its official Twitter account to “stay tuned for future updates.”
Binance and Coinbase have or will shortly suspend trading on LUNA. The Kraken exchange has suspended deposits and withdrawals.
Binance CEO Changpeng “CZ” Zhao explained the decision was in part because of a lack of understanding among users of LUNA’s supply expansion.
“Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading,” he said in a Twitter thread.
In a now-futile effort to restore the UST 1:1 peg to the US dollar, the Terra protocol is designed to mint LUNA continuously, and the current circulating supply has exceeded 6.5 trillion, up from an original supply of 1 billion. That has spurred the price collapse to well below one thousandth of a cent.
Coinbase had initially announced that they would facilitate further trading by creating a more precise quote tick of 0.00000001 on all WLUNA pairs. Coinbase only ever offered trading on wrapped-LUNA, an Ethereum token representation of the native Terra asset. But just 11 hours later, they too opted for a total end to WLUNA trading, effective from 12:00 Noon ET, citing “recent volatility involving Terra ecosystem assets.”
Just 7 days ago, the total market cap of LUNA and UST alone stood at north of $45 billion. Today, it is essentially worthless, as stakeholders assess various options for what might come next.
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