Home » Binance CEO Changpeng Zhao says Terra (LUNA) fork would be useless

Binance CEO Changpeng Zhao says Terra (LUNA) fork would be useless

by Thomas

After breaking out of his usual neutrality in recent days, Binance CEO Changpeng Zhao said via Twitter that the Terra fork was pointless and would not create any new value. He said the best way to get UST back on track would be to combine Terra’s Bitcoin (BTC) reserves with the LUNA token burn.

Changpeng Zhao critical of Terra

The CEO of Binance had already been understandably critical of the management of the Terra ecosystem’s collapse, and more specifically of its LUNA and UST tokens. Indeed, on 13 May, Changpeng Zhao had publicly stated that his teams had proposed solutions to Terra, which had not been answered.

Later the same day, Do Kwon, the founder of Terra, published a proposal to save the blockchain structure and try to maintain its community through the distribution of a new token.

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

” It won’t work. Performing a fork does not give any value to the new fork. This is wishful thinking. You can’t undo all transactions after an old snapshot, both on and off the chain (exchanges). Where is all the BTC that was supposed to be used as reserve? “

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

A lack of transparency from Terra

For the past few days, CZ has been arguing that the best way to get back to the $1 peg for UST would be to burn the amount of LUNA tokens needed. Indeed, since the UST depeg, a huge amount of LUNA tokens have been created, totally diluting their value.

” The reduction in supply should be done by burning, not forking at an early date, and abandoning all those who tried to save the token. I don’t own LUNA or UST either. I’m just commenting. “

The burn added to the use of Terra’s Bitcoin reserves could, he says, get UST back on track.

“Create [minter], forker, that doesn’t create value. Buying, burning, it does, but it requires funds. Funds that the project team may not have. […] In this respect, I would like them to be more transparent. Much more! And especially regarding the transactions on the blockchain (txids) of all funds. “

He ends by adding that mistakes are human, they can be made up, but it is essential to always be transparent with your community:

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

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