©Reuters. TerraUSD Issuer Briefly Halts Blockchain Transactions
New York, May 12 (.).- The issuing platform of the stable cryptocurrency TerraUSD, Terraform Labs, briefly paralyzed transactions on the block chain this Thursday to “avoid governance attacks” after its recent crash, attributed to the loss of its parity with the dollar.
In a governance attack, users accumulate tokens (in this case, TerraUSD and Luna) to have more voting power and thus manipulate the platform’s protocols, so it paralyzed their movements for a couple of hours waiting to recover “two thirds of the voting power”.
The platform, on its official Twitter (NYSE:), indicated that it had paralyzed the blockchain due to the “serious inflation” of Luna -a cryptocurrency that it also issues and that is linked to the value of TerraUSD through an algorithm-, in addition to the “reduced cost of attacks”.
The company, co-founded by the South Korean Do Kwon, stated a few hours ago that its developers have been in a “war room” for four days, “working on solutions”, to stop what it described as a “bleeding” after the collapse of TerraUSD at a low of 23 cents.
Finally, Terraform Labs announced that it was releasing a “patch” and resetting its network, resuming block production.
Kwon, after unsuccessfully trying to stabilize the fall by drawing on his reserves, advanced yesterday that he will explore options to attract external capital and that he will seek to “rebuild” this digital currency with a mechanism backed by reserves of an asset instead of the algorithm with which which worked until now.
The collapse of “stablecoins” has shaken the cryptocurrency market, including bitcoin, the most widely used, which despite its slight rebound today has lost almost 60% from its all-time highs, recorded six months ago, when it came close to the 69,000 dollars, and in the year 37%.