Will Validators Become The Next Big Threat For Terra Classic (LUNC)?
LUNC News: The implosion of the Terra ecosystem in May of last year, which cost a total of $60 billion, revealed cracks in the foundations of the cryptocurrency sector and sparked a year of cascading financial catastrophes that have not yet been abated. The Cosmos-based network spun out of the collapsed Terra ecosystem has somehow The post Will Validators Become The Next Big Threat For Terra Classic (LUNC)? appeared first on CoinGape.
LUNC News: The implosion of the Terra ecosystem in May of last year, which cost a total of $60 billion, revealed cracks in the foundations of the cryptocurrency sector and sparked a year of cascading financial catastrophes that have not yet been abated. The Cosmos-based network spun out of the collapsed Terra ecosystem has somehow been able to maintain and sustain itself in the broader crypto market, although being riddled with numerous faults and inadequacies.
LUNC’s Biggest Problem
After debating over the network’s burn mechanism and discussions spreading across several governance proposals, the network still faces another major hurdle. While there are a respectable number of validators currently present on the network, the development among these validators is gradually becoming a matter of concern.
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According to Classy Crypto, an advocate of LUNC who also happens to own a validator node on the network, the most significant issue that is currently impacting Terra Classic (LUNC) is the recent uptick in the number of validators who are providing staking services at zero-commission.
He points out that, a validator offering no commission translates to zero development and in turn adversely affects smaller validators, leading to go bankrupt. In most cases, validators will not charge any commission in order to attract a larger number of users that are interested in staking on the network for rewards.
While speaking on the governance proposal that looked to resolve the issue, and was recently approved, he was quoted as saying:
We passed a 5% min fee proposal, all LUNC validators/delegates should urge their validators to switch over. 5% guarantees funds so validators can actually build on our ecosystem.
“Making 5% more rewards on your Luna Classic is not worth 50%+ validators running off losing money every month/0 building happening from them.”, he further added.
LUNC’s Validator Troubles
Earlier, LUNA validators PFC, Lavender.Five and Red Herring have called out few newer validators who raised the commission levels from 0% to 20% without alerting their delegators. According to Larry, a Delphi Digital engineer, LUNC validators can earn up to $192k per year after earning the 2.5M LUNA genesis delegator attribution.
In addition to the validators boosting their commission without alerting their communities, it was also identified that three additional validators viz. Luna Whale, Lunatic Validator and Long Live Luna were engaged in unethical activity. Red Herring even provided specifics regarding the configuration of each of the three validators and noted several suspicious behaviors.
As of right now, the price of LUNC is trading at $0.0001599, which represents a decrease of 1.65% over the past 24 hours in contrast to a decline of 6.11% over the last seven days.
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