Table of Contents Hide
- Do Kwon’s ‘Funny Morning’ with the de-pegging jokes turned into a scary reality
- UST de-linking turns into a nightmare for Terra, lunatics and project investors
- The founder of Binance says he is very disappointed in how the UST/LUNA incident was handled, the Terra blockchain is again temporarily closed
- The Terra community is considering restoring a snapshot of the circuit prior to the attack, every Terra token created on the network has suffered huge losses
After days of carnage, the two leading crypto-assets based on the Terra blockchain fell to significant lows. LUNA fell to $0.00000100 per coin and the once stable terrausd (UST) coin hit a low of $0.044 per unit. After temporarily halting the Terra blockchain and restarting it, the team halted block production again at a block height of 7,607,789. The team restarted the blockchain at 8:46 a.m. (ET) and disabled swaps on the blockchain.
Do Kwon’s ‘Funny Morning’ with the de-pegging jokes turned into a scary reality
Five days ago, people began to worry about the Terra terrausd (UST)steblecoin as there was a slight deviation from parity at $1. At the time, rumors and speculation regarding the failure of the stablecoin Terra began to spread like wildfire. However, Terraform Labs co-founder Do Kwon treated it as a “funny morning” and said that Terra’s detractors were now “all poor.” Kwon went on to saythat at the time the UST’s rejection of pigging was no big deal, and the Terra community believed it too.
So this $UST depeg is now in the room with us.
I prescribe 24 hours of pegging for the next 7 days.
– Do Kwon 🌕 (@stablekwon) May 8, 2022
Then the decentralized exchange (dex) Curve Finance noticed significant terrausd (UST) sales happening on the trading platform. “Someone started selling UST en masse yesterday, so it started falling,” Curve said on its Twitter account. “However, this was met with a lot of resistance, so the peg was restored. To get enough USD for this, a lot of ETH and stETH were also sold.” The Terra team seemed to be taking things more seriously, and Luna Foundation Guard (LFG) explained that it was lending $1.5 billion in bitcoins (BTC) and terrausd (UST) to professional market makers to protect the peg.
UST de-linking turns into a nightmare for Terra, lunatics and project investors
At this point, the community was much more shaken, and significant funds began to flow out of Anchor Protocol. The Anchor Protocol was the third largest decentralized finance (defi) protocol, with about $18 billion locked up just before the chaos began. Between May 5 and today, the total blocked value (TVL) of the Anchor protocol has dropped from $18 billion to $410 million to dateThe other defi protocol that was affected by the Terra LUNA native token was the liquid-stacking app Lido. On May 6, Lido had over $18.6 billion, and today Lido has about $8.95 billion locked up.
The once stable token terrausd (UST) is currently trading at $0.094 per coin after hitting a high of $0.84 a day earlier. UST fell to a low of $0.044 per unit about 11 hours before this article was written. While many digital currency trading platforms have disabled Terra-based wallets, several exchanges still allow UST deposits. FTX is currently the most active UST exchange on Friday, and the leading trading pair with UST is tether (USDT). Tether accounts for 37.78% of all UST trading, followed by BUSD (31.59%), USD (29.83%), EUR (0.46%) and USDC (0.29%).
Terra’s native token LUNA suffered even more than UST as its price traded well below the US penny. Within 24 hours, LUNA’s price hovered between $0.04333980 and $0.00000100 per unit. Currently, it is not easy to sell LUNAas most exchanges do not accept deposits from the Terra chain. FTX is the most active LUNA exchange today, and BUSD is the most active trading pair of the coin with 73.64% of all LUNA swaps. BUSD/LUNA pairs are followed by USD (13.60%), USDT (10.32%), and BTC (0.89%).
The founder of Binance says he is very disappointed in how the UST/LUNA incident was handled, the Terra blockchain is again temporarily closed
Following the suspension of LUNA and UST on Binance, Changpeng Zhao, founder of the trading platform known as CZ, said he was disappointed in the Terra team.
“I am very disappointed in the way this UST/LUNA incident was handled (or not handled) by the Terra team,” CZ tweeted on Friday. “We asked their team to rebuild the network, burn the extra LUNA and restore UST tethering.So far we haven’t received any positive response, or any response at all. This is in stark contrast to Axie Infinity, where the team took responsibility, had a plan, and actively communicated with us. “And we helped.”
Binance’s book is blank. Never seen that before pic.twitter.com/ez4ZZZT9sDR
– Hasu⚡️🤖 (@hasufl) May 10, 2022
On Thursday, the Terra team stopped the blockchain and applied a patch to the codebase before restarting. After restarting the network, at 10:13 p.m. (ET) Thursday night, the team stopped blockchain production again“Terra blockchain officially stopped at block 7607789,” the team tweeted“Terra validators stopped the network to develop a plan to rebuild it.” Then, at 8:46 a.m. (ET) Friday morning, the team announced that the network was back up and running, but some features were down.
“Terra Blockchain has resumed blockchain production,” the Terra team explained “Validators have decided to disable on-chain exchanges, and IBC channels are now closed. Users are encouraged to transfer off-chain assets, such as bETH, to their home chains. Note: the Wormhole Bridge is currently unavailable.” Following the tweet, the team
The Terra community is considering restoring a snapshot of the circuit prior to the attack, every Terra token created on the network has suffered huge losses
Moreover, talk of restarting the project has begun, with one Terra supporter talking about taking a snapshot of the circuit before the attack.
“The community is deciding on a new [Terra network] between restoring the snapshot before the attack, removing TFL, fully provisioning UST, and developing [and] discussing new mechanisms for LUNA. “We need to salvage the remaining value of the ecosystem [and] community and rebuild the right way,” a Terra supporter nicknamed “Stablechen”In addition to LUNA and UST, Terra-based tokens have been hit hard. Anchor tokens (ANC) lost 93% against the U.S. dollar this week, and Orion Money (ORION) lost 92.4% in seven days.
Do Kwon: “95% will die [coins], but there’s fun in watching companies die.”
eight days ago. Ironic. pic.twitter.com/fEQMZIyd9a
– Pedr🌐 (@EncryptedPedro) May 11, 2022
Moreover, Terra also had a number of tokens that represented specific fiat currencies, such as the Korean won (KRW). In the last seven days, Terra’s token terrakrw has lost 84.4%, and the same can be said for Terra’s token of the Australian dollar. Terra even minted IMF Special Drawing Rights (SDR) currency and synthetic equity tokens using Mirror Finance. All Terra blockchain-based tokens have been shaken to the ground, and most of them simply have no value. Currently, the mirror.finance web portal cannot be accessed because the site is down and about $39.17 million is blocked in the app.
In a note sent to Bitcoin.com News, Dan Ashmore, a cryptocurrency data analyst at Invezz.com , explains that the Terra blockchain fallout brought a lot of pain and grief.
“It’s a black day for cryptocurrencies,” Ashmore said in a statement. People have lost their livelihoods, hundreds of platforms are on the verge of collapse, and years of building are gone. College funds, life savings, leveraged gambling – there’s a lot of pain. Regulators are watching the situation, and this is clearly a step backward. Obviously, it is also a failure of the decentralized and non-collateralized stablecoin system. A grand financial experiment has gone awry and taken a big chunk of the market with it. Be careful.”
Image credits: Shutterstock, Pixabay, Wiki Commons