Idea: a circuit breaker to halt chain activity

First of all, I’d like to say my heart goes to everyone who has lost money or got liquidated due to recent events. I myself have been liquidated, and while it’s still a few months of hard work (only got into crypto early this year), it’s probably nothing compared to what most of you who had been here much longer had.

From what I’ve been reading on twitter, I thought that a big part of the attack happened on CEXs and that the mechanisms on the chain itself, i.e. the mint and burn mechanism were working just as intended. But because there was FUD, that probably got a lot of people scrambling to exit the ecosystem and move to other chains.

Now, in TradFi where I used to work, there were circuit breakers in place to manage large market swings. In essence, trading activity is halted (or suspended) to give participants some room to breathe (and maybe for logic to overtake emotion). But these decisions are typically based on regulations, or the rules of an exchange. Since crypto is decentralized, we don’t have rules in place unless the community decides to write it.

So to bounce the idea – what if we had a circuit breaker in place to prevent runs like this from occurring in the future? Perhaps by way of vote, where a majority or a sizable percentage (80%-90%?) can vote to suspend activities on the chain (essentially turn it off). A mechanism like this in theory should buy Do and the rest of TFL / LFG more time to decide the best course of action, without having to rush through options.

What I have in mind is similar to a bank outage when they realize there’s an issue with their system/machines that poses a significant amount of value at risk. For a day or two, customers won’t be able to access their funds. But they know that when the system comes back online, their assets would still be there.

Anyway, it’s a crazy idea. And I’m sure I missed out on a lot of things because I’m still pretty new to the space. I’d be interested to read on what you guys think though.


That’s a prudent idea. Also should include other protocols in the ecosystem like Anchor to halt when vote passes.

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The problem here is even if this were possible on the terra chain , there are many bridged derivitives of UST (Axlar, wormhole, shuttle, anyswap) and many exchanges that support UST. There would be no way to design a circuit breaker to halt the trading of UST or Luna, and this would likely have a negative effect on perception and sentiment if the blockchain were to halt in such a situation.


Exactly. Which is why bridges will/should eventually fail.

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Haven’t really thought about the specifics. But since these apps are running on the mainnet, essentially all their transactions would also come to a halt if the mainnet is paused, right? A similar experience to an unplanned outage.

Sorry. I definitely did not think about the bridges.

Though in terms of perception/sentiment – if it was the community who wrote the rules, and voted for transactions on the chain to be paused (under specific conditions), I don’t think the effect would be negative for majority of the holders.

You’re probably right when it comes to the community partners, bridges, and exchanges.