Security Concerns Prompt Cancellation of Terra Dapp Expo

Share Article
In Brief
  • The Terra Dapp Expo has been cancelled following billions lost in Terra spiral.

  • The company organizing the event will refund users.

  • They will host Twitter Spaces and Discord conversations in upcoming days for those with queries.

  • promo

    KuCoin Releases KCS whitepaper – a Path for Geek to Mass Adoption Read now!

The Trust Project is an international consortium of news organizations building standards of transparency.

Organizers of the Terra Dapp Expo have decided to cancel the upcoming convention that was meant to take place in June 2022 in Austin, Texas.

LUNA fans (dubbed “LUNAtics”) earnestly hoping to present their Terra decentralized applications in Austin, Texas next month will have to wait as security concerns surfaced following the de-pegging of the Terra stablecoin. According to the event’s Twitter account, “…there have been serious threats made from some understandably upset individuals who’ve lost everything in the crash & we don’t want to risk anyone’s health/life,” referring to investors losing billions of dollars following the crash of TerraUSD (UST), and its sister coin, Luna (LUNA).

Terra’s price dropped from one dollar to mere pennies as mechanisms designed to prevent collapse failed. Multiple large withdrawals from Anchor Protocol, where lenders deposit virtual currency to earn interest, caused the Terra to de-peg from the dollar, prompting more investors to withdraw their funds and sell the coin, resulting in a downward spiral in price. “Once liquidity evaporated, this perpetuated the collapse of the stablecoin,” Clara Medalie told Bloomberg. UST’s creator, Do Kwon, commenced talks with Alameda Research, Galaxy, Jane Street, and Jump Crypto to raise $1.5B to restore Terra’s liquidity.  

‘We feel your pain’

“Much like the majority of the #LUNAtics community, we as a validator AND as individual members of the tram have ll incurred massive losses – So do know, we feel your pain and are still here to offer our service and support,” organizers of the expo went on to say. They further added that discussions would take place on Discord and Twitter Spaces in the coming days to address queries.

As more withdrawals depleted over $12B in Terra, the Luna Foundation Guard, a nonprofit designed to back up Anchor reserves, exhausted as the bank sold its bitcoin holdings, driving the price of bitcoin lower this week, sending shockwaves through the broader cryptocurrency market.

How do stablecoins work

The rationale behind stablecoins like Luna and its sister coin Terra is that they enable purchases of other cryptocurrencies like bitcoin without using the traditional financial system, where a bitcoin purchase could take a few days to clear. Stablecoins are pegged to fiat, or government-issued money, making them more stable than currencies like bitcoin and Ethereum. To maintain their peg to a fiat currency, stablecoin issuers can choose to hold reserves of cash and short-term U.S. government securities or to use software to facilitate arbitrage between two native tokens, with each restoring the other like in Terra’s case. UST and LUNA can be swapped for each other to maintain their pegs.

What do you think about this subject? Write to us and tell us!

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Share Article

David is an electronic engineer with nine years of experience. He joined BeInCrypto to combine his passion for writing and his interest in fast-moving industries, cultivated from his university days. He hopes to make crypto easy to understand.

Follow Author

KuCoin Releases KCS whitepaper – a Path for Geek to Mass Adoption      

Read now

KuCoin Releases KCS whitepaper – a Path for Geek to Mass Adoption

Read now

Olympus, a P2E NFT Game Similar to Clash Royale, Is Making Headlines

Read Now