“Minting, forking, don’t create value,” CZ remarked, pointing out the possible problems with forking Terra.
The idea of hard forking the Terra blockchain to resurrect the once-thriving LUNA and UST ecosystems was recently questioned by Changpeng “CZ” Zhao, the CEO of crypto exchange Binance. Following up on that, the CEO shared his thoughts on the best course of action for collapsing crypto ventures with the crypto community.
“This won’t work,” he stated, dismissing the validators’ proposal for a hard fork to TERRA2, which would involve distributing a new version of LUNA to all holders based on a snapshot of holdings taken before the market collapsed. CZ proposed:
“Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin. I don’t own any LUNA or UST either. Just commenting.”
Instead, he proposed that the Terra community first spend its Bitcoin (BTC) reserves to repurchase UST in order to restore pegging.
“Minting, forking, don’t create value,” CZ remarked, pointing out the possible problems with forking Terra. He did, however, propose buying back and burning as viable options for reviving the token’s market value. While expressing his support for the Terra community, CZ emphasized the need for “much more transparency from them,” which includes information on specific on-chain transactions (transaction ids) for all funds:
“Failures can/will happen. But when they do, transparency, speedy communication and owning responsibility to the community is extremely important.”
CZ further stated that Binance had no active investments in Terra and had not acquired any UST holdings, putting to rest recent speculations on Crypto Twitter that Binance was interested in Terra:
“Binance Labs invested $3m USD in Terra (the layer 0 blockchain) in 2018. UST came much later after our initial investment.”
Binance Labs, Binance’s investment arm, has invested in a number of initiatives over the last four years, with varied degrees of success and failure, according to CZ.
Finally, CZ believes that Terra can recreate itself “properly and sensibly”
As the Terra ecosystem began its death spiral, Binance was among the first to stop UST and LUNA trade on its platform. Binance users were unable to trade the LUNA/BUSD and UST/BUSD pairs as a result, just one day after Terra blockchain validators were forced to shut down the network on May 12.
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