Terraform Labs says Terra’s blockchain has been halted to protect against a possible attack:
Terra Validators has decided to halt the Terra network to prevent control attacks after a serious LUNA inflation and a significant drop in attack costs,” Terra’s official Twitter account said.
This came after screenshots were published, presumably from Terra’s official Discord, stating that the network would be halted and restarted with the steering disabled. The purpose of this move is to prevent an attack.
This came after the UST price, which lost its peg to the US dollar, caused havoc for the linked token Luna (which is supposed to help UST maintain its peg). Cashing out UST holders led to a sharp increase in the supply of Luna while also causing its price to fall. Today, Luna’s supply increased from $1.5 billion to $32.3 billion, while its price fell from $1 to $0.016.
This came a day after Lido Finance’s staking protocol warned of a possible attack on the network. It was noted that Terra’s economic security had plummeted, making it vulnerable.
It is theoretically possible to shut down the network and freeze assets in an elaborate economic attack,” the project said in a Twitter post.