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Binance CEO Changpeng Zhao Says Forking Terra (LUNA) Would Be Useless

Binance CEO Changpeng Zhao Says Forking Terra (LUNA) Would Be Useless
Written by madishthestylebar

Changpeng Zhao criticizes Terra

the Binance CEO had already not been tender, and rightly so, vis-à-vis the management of the collapse of the Terra ecosystemand more particularly its LUNA and UST tokens. Indeed, on May 13, Changpeng Zhao had publicly stated that his teams had proposed solutions to Terra, which remained unanswered.

Later the same day, Do Kwonthe founder of Terra, had published a proposal in order to save blockchain structure and to try to maintain its community via the distribution of a new token.

Following this announcement, CZ took the opportunity to provide a new update on the situation and clarify his ideas. According to him, the idea of ​​forking towards a “Terra 2” put forward by Do Kwon is doomed to failure since this will not create any new value:

“It won’t work. Performing a fork gives no value to the new fork. It’s wishful thinking. You cannot rollback all transactions after an old snapshot, both on-chain and off-chain (exchanges). Where is all the BTC that was supposed to be used as a reserve? »

Also, in order to protect Binance users, Changpeng Zhao recently announced that UST/BUSD and LUNA/BUSD pairs would be disabled on Binance, at the same time implicitly explaining that the price of these last 2 was clearly not on the way to rising again.

👉 To dig deeper: Why did the UST stablecoin collapse and what is the future of the Terra ecosystem?

A lack of transparency coming from Terra

For a few days, CZ has been defending the idea that the best way to find the peg (benchmark) of 1 dollar for the UST would be to burn the amount of LUNA tokens needed. Indeed, since the UST depeg, a staggering sum of LUNA tokens has been created, thus totally diluting their value.

“Supply reduction should be by burning, not by forking at an ancient date, and abandoning everyone who tried to save the token. I don’t own a LUNA or UST either. I’m just commenting. »

The burn added to the use of Bitcoin reserves of Terra could, in his view, put the UST back on track.

” Create [minter], forking, it does not create value. Redeem, burn, it does, but it requires funds. Funds that the project team may not have. […] In this regard, I would like them to be more transparent. Much more ! And more particularly concerning transactions on the blockchain (txids) of all funds. »

He ends by adding that to err is human, remediable, but that it is essential to always be transparent vis-à-vis your community :

“Failures can and will happen. But when they do happen, it’s extremely important to be transparent, communicate quickly and take responsibility for the community.”

A noticeable absence of Do Kwon

Although the name of the founder of Terra is not mentioned, it is very likely that CZ is referring to the lack of communication from Do Kwon, who was totally absent from radar for almost 3 whole days during the loss of value of his 2 tokens, and this after telling his community to “ hold on “.

As mere observers, we currently don’t know what’s going on inside Terra’s offices, but it seems unfortunate that the teams behind the project are refusing help from Binance’s CEO, who has already financially helped projects in difficulty in the pastespecially following the Ronin sidechain hack for example.

Changpeng Zhao also recalls through his tweet that Binance Labs had participated financially to the tune of $3 million in 2018 to support the development of the Terra blockchain. Finally, he states that: the UST came much later after our initial investment “.

👉 To read on the same subject: Trading of LUNA tokens is halted on Crypto.com following a price error

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About the Author : Maximilien Prue

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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make the blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
All articles by Maximilien Prué.

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