The suspension of Terra ETPs comes following the collapse of the network which has made its operation inconsistent.
Following the recent collapse of the Terra ecosystem, VanEck and 21Shares have decided to halt the creation and redemption of shares in their Terra exchange-traded products (ETPs). The processes will thus be halted by the 21Shares Terra ETP (ticker LUNA SW) and the VanEck Terra ETN (VLNA GR).
Terra’s native cryptocurrency, LUNA, was supposed to assist the UST stablecoin in maintaining its USD peg. However, the LUNA price fell to zero, while the UST continued to depreciate against the US dollar. Terraform Labs was eventually forced to temporarily halt the blockchain, which has now been resumed. Hany Rashwan, CEO and co-founder of 21Shares, a crypto ETP provider, stated:
“We will continue to closely monitor this fast-evolving situation on the underlying. The Luna network is currently operating intermittently and inconsistently producing blocks and cannot operate normally. Therefore transactions can still be performed but in a disrupted environment.”
VanEck, on the other hand, stated that it would take a similar stance on the issue. The issuer stated, “The low value of Luna caused issues and risks for the Terra network, prompting its validators to decide to halt the network.” It is currently unknown when (or if) the network will be restarted.”
Terra’s Move To Recovery
After all of the drama, Terra founder Do Kwon came forward with a plan to revitalize the LUNA ecosystem. He proposed redistributing and resetting Terra network ownership to $1 billion. Do Kwon redistribute this amount among LUNA holders, UST holders, the Community Pool, and other ecosystem stakeholders?
There were also reports that Swiss asset manager GAM would come forward to bail out the company, but it denied any such plans. It will be interesting to see what other actions its developers have planned in the future.
