The Terra (LUNA) blockchain network was temporarily shut down to install a patch to protect against governance attacks. Meanwhile, the amount of cryptocurrency trade increased by 722 percent. The Terra crisis began when Terra’s algorithmic-based stable coin TerraUSD(UST), which is pegged to the dollar, dropped to nearly $0.6.
Terra (LUNA) Briefly Shuts Down; Global Crypto Market Recovers Slightly, Trade Volume Jumps 722%
Binance, one of the most famous cryptocurrency exchange markets in the world, has temporarily stopped the withdrawal of UST and LUNA. All of this had a cascading impact on LUNA prices, which spun out of control.
The crypto market has been shaken by the controversial crash of the Terra USD stable coin.
As of 8.50 p.m., the global crypto market capitalization had increased by 1.79 percent to $1.27 trillion. According to Coinmarketcap data, worldwide crypto volume increased by 722.42% to 1.79 trillion dollars.
Terra (LUNAprice )’s dropped to the point where TerraLabs had to temporarily shut down the blockchain to install a new patch to prevent governance attacks.
Terra Validators have reached a decision to prevent additional delegations while they devise a method to repair and distribute a new token to the rest of the ecosystem’s members.
Institutional capital is increasingly entering the crypto sector as it matures. As a result, Bitcoin and other cryptocurrencies have developed a strong correlation with significant economic indicators. This also implies that the road ahead may be a little shaky.
Prices Of Other Cryptocurrencies
The world’s largest cryptocurrency, Bitcoin (BTC), was trading at $29,892.19, up 4.45% in the last 24 hours.
Ethereum (ETH) was trading at $2,060.97, up 0.19 percent.
Dogecoin (DOGE) was trading at $0.08913, up 7.37 percent. It has a volume-to-market-cap ratio of 0.2287.
Shiba Inu (SHIB) was trading at $0.00001232, up 7.9%.
What Happened To Terra (LUNA)?
UST is an algorithmic stable coin that is pegged to $1 using smart contracts and the open market (although this might change in the near future).
Its value was determined by arbitrage traders minting LUNA when UST was above $1 and burning it when UST was below $1 until the entire house of cards collapsed.
And this continuous trouble with TerraUSD or UST, which is meant to be tied equivalently to the US Dollar ($1), has primarily led to the latest meltdown in the crypto sector, which has wiped out billions of dollars in the market.
Luna’s structure was faulty from the start, as it significantly reflected features of an under-stabilized coin, not to mention the economic problems that followed.
In the meantime, Terra’s Blockchain isn’t the only victim of the stable coin’s instability. Bitcoin has recovered 8% in the previous 24 hours, after falling to levels not seen since late 2020 earlier this week.
However, during this time when LUNA is down, one of Switzerland’s top asset managers has declared that it is in talks to invest up to $3 billion in the project to revive it and restore it back to its $1 peg.
The project is being saved by GAM. The Zurich-based firm, which is listed on the SIX Swiss Exchange and manages $95 billion in assets, indicated that it plans to invest between $2 and $3 billion.