On the night of May 13, the Terra blockchain stopped transactions and halted operations. A few days before, the main stablecoin of the terra network, UST, announced that they had a liquidity problem. By this, they mean the withdrawal of 32,000 BTC from the stablecoin algorithm, which led to its depreciation. At the moment, the exchange rate of the stablecoin pegged to the US dollar is 0.13 cents. The collapse of Terra, with a capitalization of $40 billion, is a significant matter for the crypto market. The $LUNA blockchain coin fell from $80 to $0.03 in 3 days. The community still can’t believe they screwed up.
Along with this disappointment came a series of turmoil in the DeFi market. Cross-blockchain liquidity pools, including stablecoins, reacted to the sharp depreciation of the UST, and even such a strong player as USDT traded at 96 cents. Not the best news against the background of the falling rate of Bitcoin.
A real estate tokenization project was also implemented on the Terra blockchain. Entrepreneurs have already managed to collect the necessary amount to deploy the project and have invested in the acquisition of the site (details were not disclosed).
What can be done to prevent this from happening in the future? In the opinion of Stobox CEO Gene Deyev, networks on which a lot of liquidity is being consolidated should be regulated. We cannot allow infrastructure projects that develop trust in the industry and involve institutional players to be exclusively in formal regulation. The Stobox team is ready to support the development of the rules and principles for regulating blockchain networks and stablecoins in order to create a solid foundation for the development of the DeFi market.