CZ stated that “minting and forking don’t create value,” referring to the potential concerns with forking Terra.
Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, publicly questioned the idea of hard forking the Terra blockchain in order to revitalize the once-thriving Terra (LUNA) and TerraUSD (UST) ecosystems. Following that, CZ shared his thoughts on the best course of action for failing projects in the crypto community.
“This won’t work,” CZ stated, dismissing the validators’ notion of a hard fork to TERRA2, which would entail giving a new version of LUNA to all holders based on a snapshot of the holdings prior to the market collapse. 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 its pegging.
CZ argued that “minting and forking don’t produce value,” referring to the potential concerns with forking Terra. He did, however, propose buying back and burning as an excellent strategy to restore the token’s market value. While expressing support for the Terra community, CZ emphasized the need for “far more transparency from them, much more!,” which includes information regarding specific on-chain transactions (transaction IDs) of all funds:
“Failures can/will happen. But when they do, transparency, speedy communication and owning responsibility to the community is extremely important.”
CZ went on to say that Binance had no active investments in Terra and had not acquired any UST holdings, putting to rest the persistent allegations on Crypto Twitter about Binance’s interest in Terra:
“In 2018, Binance Labs invested $3 million(R48.7M) USD in Terra (the layer 0 blockchain).” UST came significantly later than our initial investment.”
Binance Labs, Binance’s investment arm, has invested in a number of initiatives over the last four years, with varying degrees of success and failure, according to CZ.
Finally, CZ thinks Terra may recreate itself “properly and sensibly:”
“Regardless of my personal views or the final solution, we will always be here to support the community in any way we can.”
Binance was among the first to ban UST and LUNA trade on its platform when the Terra ecosystem began to crash.
As a result, only a day after Terra blockchain validators were forced to take the network offline on Thursday, Binance users were not able to spot trade LUNA/BUSD and UST/BUSD pairs.
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