Referring to terrascope's data, with terraform labs increasing the circulation supply chain of Luna tokens from 386 million three days ago to more than 6.5 trillion, in an attempt to maintain the sister algorithm to stabilize the 1:1 anchor between ust and the US dollar Earlier on Thursday, binance first cancelled its support for the futures contract trading of Luna tokens, and then the world's largest cryptocurrency exchange tentatively made most of the spot trading of Terra (LUNA) and terrausd (UST) tokens.
Trend of ust this week (from binance)
In addition, for Luna, binance also suspended all cross / isolated margin transactions. Soon after, terraform labs announced that it had frozen the terra blockchain and was working on a restructuring plan.
It should be noted that this is the second time that Terra blockchain has been frozen. Earlier Thursday, terraform labs announced that it had suspended the network to prevent any form of hacker attack.
It is reported that terrausd (UST) aims to interweave with Luna tokens without fixed value, so that the former can become an algorithmic stable currency anchored to the US dollar.
If the value of ust falls below $1, Terra network will consume Luna to feed back the stable currency. If the UST exceeds $1, the algorithm can balance its currency value by making more Luna tokens.
However, when terrausd fell below $1 earlier this week, the algorithm of the blockchain network began to suffer and eventually collapsed.
As the crypto community lost confidence, the panic selling run plunged the price of Luna tokens from about $80 earlier this week to almost worthless $0.0000011.
At the time of publication, the currency value of ust was only 3 cents. Although terraform labs has been trying to find a solution to the problem - including seeking more than $1 billion in financing - it has not been able to turn the corner.