Until the Terra blockchain was suspended for the second time in a bid to save the failing ecosystem, the total supply of Terra (LUNA) had risen to more than 6.5 trillion.
As per Terra Analytics, the supply of Luna was roughly 340,000 during the few weeks that have passed, up until just three days earlier. This trend persisted until Monday, May 9, when TerraUSD (UST) lost its dollar peg, sending Terra (LUNA), a linked token that was intended to significantly boost the value of TerraUSD (UST), into a downhill trajectory.
Terra (LUNA) trades were expected to assist TerraUSD (UST) maintain parity with the US dollar, according to the algorithmic stablecoin’s setup. The mechanism put an awful lot of decline on Terra (LUNA) when TerraUSD (UST) lost its peg and traders rushed to sell massively. Unfortunately, the further the price of Terra (LUNA) dropped, the more decline there was. This set off a chain reaction in which the price of Terra (LUNA) plummeted and supply grew at an exponential rate.
The blockchain distributed 40 million Terra (LUNA) tokens on May 10. The circulation supply of Terra (LUNA) began to rise on Wednesday, reaching 1.5 billion tokens. Notwithstanding the chain being paused for a brief duration on May 12, this achieved a new high of 176 billion tokens. It has now reached 6.5 trillion and would have still been increasing if the chain had not been terminated yet again.
Developers working on Terra eventually chose to freeze the blockchain early on May 13 while they discover a method to resurrect the project after the supply increased roughly 17,000 times in only three days.
Terraform Labs took to Twitter to state that “Terra Validators have halted the network to come up with a plan to reconstitute it.”
The Terra blockchain has officially halted at block 7607789.
Terra Validators have halted the network to come up with a plan to reconstitute it.
More updates to come.
— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) May 13, 2022
Bitcoin (BTC) enthusiasts have jumped on this supply shock, pointing to the supply of Bitcoin (BTC) and a fixed emission schedule, which will fall down at about 21 million coins.