coindesk.com
The Terra blockchain halted after the terra token (LUNA) fell in value to below 2 cents on Thursday.
According to a tweet from Terraform Labs, the company behind the Terra ecosystem which includes the LUNA governance token and several algorithmic stablecoins, the price of LUNA fell too low to "prevent governance attacks," citing LUNA inflation as one factor. LUNA fell in price from nearly $120 in early April to between 1 and 2 cents on Thursday.
The blockchain being halted means no transactions with UST, LUNA or Terra's other cryptocurrencies can be processed. Token holders will have to wait for the blockchain to restart.
Terraform said the network's validators "will coordinate" to restart the network shortly.
LUNA's price plummeted over 80 dollars in three days. TerraUSD (UST), one of the paired stablecoins, broke its peg on Monday, dropping to 37 cents at press time. Terraform's issued more than 1 billion LUNAs as circulating supply as part of an effort to reduce the sell pressure seen since Monday.
The UST stablecoin, which is supposed to maintain price parity with the U.S. dollar, lost its peg over the last weekend, but briefly recovered. It fell again on Monday, dropping to as low as 27 cents but has yet to recover its peg with the dollar. The LUNA governance token, which is meant to act as a buffer keeping UST at $1, has lost value in conjunction, but was only worth less than UST sometime between Wednesday and Thursday.
This is a developing story and will be updated.
UPDATE (May 12, 2022, 16:40 UTC): Updated with additional context.