Binance Warns Of More Terra Disruptions As Withdrawals Skyrocket
Binance, the world’s largest crypto exchange, warned on Thursday that trading Terra on its platform will be prone to disruptions.
The exchange cited surging withdrawal requests for LUNA, which have congested the network. Binance had temporarily suspended LUNA withdrawals earlier this week, and said it might be forced to do so again.
The move comes in the wake of LUNA losing over 99% of its value in a few days, while stablecoin TerraUSD sharply de-pegged against the U.S. dollar. The volume spikes experienced by Binance are likely LUNA investors rushing for the door to avoid further losses.
Binance sees more disruptions as volumes spike
Binance said there are a high number of pending transactions on the Terra network, which in turn is congesting the network and delaying transactions. The exchange said it is also working to increase the number of wallets to support more withdrawal requests.
Data from Coinmarketcap shows LUNA experienced a massive spike in volumes this week, maxing out at about $14 billion- roughly 14 times the daily amount seen a month ago. The token’s catastrophic 99% tumble has greatly damaged sentiment in the market.
UST, which has for now retained some of its market capital, is also seeing outsized volumes. Daily volumes maxed out at about $8 billion this week, compared to an average $400 million seen prior to the depegging.
Terra on mint and burn spree
Terra founder Do Kwon on Wednesday said the blockchain will mint more LUNA to use in supporting the UST peg. Data from Terra analytics shows that this has already occurred.
The issuance and the minting could also be contributing towards the congestion on the Terra blockchain.
The project also said on Thursday it will burn all UST in its community pool, burn the remaining 371 million UST cross-chain on Ethereum, and stake 240 million LUNA- indicating more large transactions on the chain.
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