Terra Blockchain Officially Frozen Over Fears of Governance Attack, Native LUNA Token Remains Down
The validators, or miners of Terra blockchain are concerned that the network could, at this point, be vulnerable to grave threats since its native LUNA token plunged earlier this week. The developers of the Terra blockchain has frozen it at block 7,603,700 in order to halt all transactions on the network. Validators fear that a whale buyer could unleash a governance attack on the Terra blockchain, now that the price of the LUNA token stands reduced to $0.00005525 (roughly Rs. 0.0043) per coin.
The LUNA token, that fell in value by nearly 99 percent over the week, serves as the governance token of Terra.
If one entity purchases over 50 percent of this LUNA token’s supply, this entity will be able to alter the protocol. Notorious miscreants could exploit the situation and manipulate the Terra blockchain for malicious purposes, CryptoPotato explained.
That is what governance tokens are capable of. They let holders submit and vote upon the governance proposals related to upgrading a blockchain protocol. Majority holders of the governance token of a blockchain can change its working.
While the developers of Terra have taken the step to halt transaction in its network as a security measure, the development has upset members of the Terra community.
Terra’s Blockchain is now officially frozen. This is an attack on freedom and decentralization :rotating_light:
Retweet if you agree. #UST #Terra #terraluna
— Billy The Kid :small_red_triangle: (@0x_billy) May 12, 2022
My funds are stuck inside Terra Bridge (Shuttle) for 11 hrs… what is going on? You can’t even call it congestion cause the bridge is literally frozen! How is fair to hold up user funds in this way…?
— crypto_carpet (@77777xxx) May 12, 2022
I lost almost 178k, bought low now it’s frozen again second time today… I thought @PHANT0M_PR0JECT was worse token this year but luna has it at moment…they got to fix this
— mike diamond hands..good or bad I have held all (@mikemer21501693) May 13, 2022
The plunge of Terra, that started earlier this week, is largely being blamed on the destabilisation of Terra USD’s (UST) peg to the dollar.
This led to conversions of UST for LUNA on a mass level.
The total market cap of Terra dropped below $2.75 billion (roughly Rs. 21,246 crore), making it the 34th largest cryptocurrency at the time of writing.
At its peak, it was the eighth largest crypto token with a market cap of about $25 billion (roughly Rs. 1,93,150 crore).
For now, it remains unclear by when would Terra blockchain be defrosted, up and running again.