Evening News | Terra Suspends Network Operation Twice; Multiple Lending Protocols Suffer Huge Losses Due to LUNA Oracle

整理：饼干，链捕手

"What important events have occurred in the past 24 hours?"

1. Terra validators halted the network again at block 7607789 to propose a reconstruction plan

This morning, Terra announced on its official Twitter that Terra validators have officially halted the blockchain at block 7607789 to propose a reconstruction plan, marking the second time the blockchain has stopped running today.

Earlier in the morning, Terra stated on its official Twitter that validators had decided to halt the Terra chain at block height 7603700 to prevent governance attacks following severe inflation of LUNA and significantly reduced attack costs. Two hours later, the Terra chain resumed block production and operation after applying a patch. (source link)

2. Zhao Changpeng: Demands Terra team restore the network, destroy extra minted LUNA, and restore UST peg

Binance CEO Zhao Changpeng tweeted that Binance has decided to suspend LUNA and UST trading due to design flaws in the Terra protocol, which led to the minting of a large amount of new LUNA. Validator nodes have paused the entire network, preventing deposits or withdrawals on any exchange.

Some users, unaware of the large amount of newly minted LUNA outside the exchange, began purchasing LUNA, not realizing that once deposits are allowed, the price may plummet further. Due to these significant risks, we have suspended trading.

It is reported that Binance is demanding the Terra team restore the network, destroy the extra minted LUNA, and restore the UST peg. So far, there has been no positive response from the Terra team. (source link)

3. FTX founder SBF purchases 7.6% stake in Robinhood

According to a filing with the U.S. Securities and Exchange Commission, FTX founder Sam Bankman-Fried purchased 56 million shares of Robinhood, representing a 7.6% stake, making him the third-largest shareholder of Robinhood. As a result, Robinhood's stock price rose 28% in after-hours trading, with SBF's holdings valued at approximately $560 million. (source link)

4. Musk: Waiting for details, Twitter acquisition temporarily on hold

Tesla CEO Elon Musk stated that the Twitter acquisition is temporarily on hold as he is waiting for details and will wait for a detailed calculation showing that spam/fake accounts account for less than 5% of the total users. Twitter continued to decline in pre-market trading, with a drop of over 18%. (source link)

5. Avalanche lending protocol Blizz Finance attacked due to LUNA oracle suspension

Avalanche lending protocol Blizz Finance tweeted that due to Chainlink suspending the LUNA oracle, several attackers were allowed to deposit millions of LUNA and borrow all collateral at a price of $0.1 based on the Chainlink oracle. Due to the time lock mechanism, the protocol's assets were depleted before the team could pause. According to DeFi Llama data, the protocol's TVL was $8.28 million yesterday and is now at $0. (source link)

6. Venus Protocol loses over $10 million due to Chainlink suspending LUNA price updates

Venus Protocol issued a statement saying that after extreme fluctuations in the price of LUNA, Chainlink suspended the price updates, causing the price of LUNA in the Venus lending market to remain at $0.107, while the market price of LUNA had dropped to $0.01. After the price update was paused, two addresses borrowed approximately $13.5 million in assets by collateralizing 230 million LUNA (worth about $2.3 million at the time), resulting in a loss of about $11.2 million for the protocol. The LUNA lending market has now been suspended, and this loss will be covered by the risk fund.

Additionally, Venus stated that it will open the market after Chainlink resumes price feeds and is currently carefully assessing the situation of UST, taking further action if necessary. (source link)

7. Chainlink responds to LUNA oracle incident: Minimum precision circuit breaker mechanism was automatically triggered, lessons will be learned

In response to multiple lending protocols claiming they were attacked due to Chainlink's LUNA oracle suspension, Chainlink stated on Discord that the cryptocurrency market experienced unprecedented turbulence last night, and the minimum precision circuit breaker mechanism for LUNA/USD Price Feeds was automatically triggered. This circuit breaker is embedded in the aggregation contract and is part of Chainlink's deep defense strategy, aimed at ensuring security and preventing flash crashes and other forms of market manipulation. Node operators, Chainlink Labs, or other third parties did not manually intervene to trigger this circuit breaker.

Some users voluntarily paused their applications, while others were informed that the price feeds were affected and received reminders to immediately pause using the price feed in their applications according to the best practices listed in Chainlink's documentation. The LUNA/USD Price Feeds are still running, but given the risk status of the asset, users are advised against using it. Chainlink will learn from this incident and continue to improve the circuit breaker parameters and other security layers across its various oracle networks.

"What excellent articles are worth reading in the past 24 hours?"

1. "What is the best design for stablecoins?" by BitMEX founder

Recently, the volatility surrounding Terra's U.S. dollar stablecoin UST has prompted Arthur Hayes to begin writing a series of articles about stablecoins and central bank digital currencies (CDBC). This article will explore stablecoins supported by fiat assets, over-collateralized crypto, algorithmic, and Bitcoin-backed stablecoins. Although there is currently no effective solution, the final part of this article will address Arthur Hayes' current view: a Bitcoin-backed stablecoin pegged to the U.S. dollar, which is also an Ethereum Virtual Machine (EVM) compatible ERC-20 asset, is the best way to combine these two incompatible systems.

2. "Understanding Vitalik's new paper 'Decentralized Society: Finding the Soul of Web3'"

This week has undoubtedly been sluggish for the cryptocurrency and NFT markets, but this is merely a reflection of the market's performance. The core of this paper revolves around the new humanistic possibilities of non-transferable "soulbound" NFTs, a topic that Vitalik Buterin has been exploring this year.

Perhaps you don't have much time to browse through this 30-page paper, or you might find some of the concepts a bit confusing. Don't worry! This article will explain, summarize, and quote some important ideas from the paper's author so that everyone can quickly grasp the basics of decentralized society (DeSoc).