May 13, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • Citadel Securities and BlackRock deny involvement in Terra’s fall.

  • USDT lost its peg to the dollar.

  • Binance and other exchanges delisted LUNA.

  • More than $200 billion in value was wiped off of the cryptocurrency market cap in a single day this week.

  • Chile’s plan to start its digital peso rollout was put on hold.

Today in Crypto Adoption…

  • Two new bitcoin ETFs launched in Australia.

  • Bitcoin is now protected by Chinese law.

  • Bank of Israel claims there is public support for its CBDC project.

  • Germany announced a tax break for crypto purchases.

The $$$ Corner…

  • Chainalysis announced a $170M funding round.

  • FTX CEO Sam Bankman-Fried takes a 7.6% stake in Robinhood.

  • Solidus Labs closed a $45 million Series B round.
  • African exchange MARA raised $23 million.

What Do You Meme?

What’s Poppin’?

Terra Blockchain Halted, Then Restarted, Then Halted Again


Yesterday afternoon, the Terra blockchain was officially halted for about an hour, meaning that blocks could no longer be submitted into the chain. “Terra validators have decided to halt the Terra chain to prevent governance attacks following severe $LUNA inflation and a significantly reduced cost of attack,” explained Terra’s official Twitter account.

The reasoning behind this decision was further explained by Paradigm CTO Georgios Konstantopoulos, who said: “the chain was secured by 100 tokens, and 150 tokens existed at some price. After LUNA inflation, the chain is still secured by 100 tokens, but 10000000 tokens exist, at 1/1000th of the price. Attacking the chain becomes trivially cheap.” This was, of course, because the LUNA price had plummeted nearly 100%. As of today, the supply of LUNA had ballooned to one trillion units, up from about 725 million a few days ago.

While the blockchain was halted, no transactions could be executed. Whether UST, LUNA, or Terra’s other cryptocurrencies, users had their tokens frozen and had to wait for the blockchain to restart.

After more than an hour, it was announced that the blockchain was live again and token holders could start using their assets again.

However, at around 10:15 pm ET, the Terra Twitter account once again announced that the blockchain was paused and that there will be “more updates to come.”

With all of the volatility in the Terra ecosystem, Binance suspended deposits and withdrawals to and from Terra. Binance also delisted its LUNA futures pairs. In addition, Bybit delisted LUNA/BTC, and eToro, which doesn’t have futures trading and leverage for crypto, delisted LUNA/USD.

Some Terra projects like Pylon and MARS put out proposals to allow their users to withdraw their locked tokens, signaling respect for the losses of thousands of investors.

Recommended Reads

  1. Dragonfly Capital on the bear market.
  2. Arca’s Jeff Dorman on how NFTs and bots put pressure on L1 blockchains.
  3. Karim Halabi on the illusion of a decentralized metaverse.

On The Pod…

Did Someone Deliberately Attack Terra/Luna to Kick off a Death Spiral?

Jon Wu, head of growth at Aztec Network, recaps a historically chaotic week in the Terra ecosystem that saw $UST depeg, Anchor depositors flee, and $LUNA fall 99%. Show highlights:

  • how $UST, $LUNA, Luna Foundation Guard (LFG), and Anchor Protocol are supposed to work
  • why Jon compares the Terra blockchain with VISA, LFG with the Fed, and Do Kwon with Jerome Powell
  • how a previous $UST de-peg foreshadowed this week’s dystopian price action
  • how a bitcoin short seemed to have kickstarted $UST’s depeg and why Jon thinks it was a deliberate attack
  • why Luna Foundation Guard originally purchased Bitcoin – and how that plan backfired and made the Terra death spiral even more violent
  • why $UST had such low liquidity this week – making it more susceptible to a bank run
  • what Jon’s predictions are for $UST and $LUNA going forward
  • what were the reasons behind Terra halting
  • why Jon does not think this will be the end of algorithmic stablecoins
  • why Jon thinks this should not affect ETH directly, even though there is a high amount of staked ETH in the Terra ecosystem

Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: