Terraform Again Halts Blockchain Behind UST Stablecoin, Luna

Sunil Jagtiani, Bloomberg News

An attendee plays with a puzzle cube displaying logos of different cryptocurrencies and exchanges at the CryptoCompare Digital Asset Summit at Old Billingsgate in London, U.K., on Wednesday, March 30, 2022. Bitcoin and other cryptocurrencies had been, up until the last few weeks, mired in a similar downtrend as other riskier assets, like U.S. stocks. Photographer: Luke MacGregor/Bloomberg , Bloomberg

(Bloomberg) -- The blockchain behind the collapsed TerraUSD stablecoin and the affiliated Luna token stopped processing new transactions for the second time in less than a day.

Terraform Labs said in a tweet from their verified account that validators, the entities responsible for verifying transactions on the blockchain, took the step to “come up with a plan to reconstitute” the Terra network.

The algorithmic stablecoin also known as UST was one of the largest before its intended 1-1 peg to the dollar disintegrated this week. The unraveling sent shockwaves through crypto, triggering deep losses before sentiment stabilized.

TerraUSD was trading at just 10 US cents as of 10:33 a.m. in Singapore, according to Bloomberg data. The Luna token has also sunk to virtually zero, compared with its all-time high of $119.51.

The blockchain’s validators earlier stopped and then restarted transactions, the crypto equivalent of turning a computer off and then on again, in order to implement a software update designed to help avoid attacks on the network.

The broader crypto market appeared to shrug off the developments. Bitcoin climbed as much as 5.5% to $30,103 and Ether rose as much as 7.5%.