Binance CEO Changpeng Zhao Doesn’t Believe In Terra’s Rescue Plan
Changpeng Zhao, the CEO of Binance, doesn’t believe in Terra’s plan of forking the blockchain, and opines that it won’t work because it won’t provide any value.
Zhao tweeted over the weekend:
“This won’t work. Forking does not give the new fork any value. That’s wishful thinking.”
Personal opinion. NFA.
This won't work. – forking does not give the new fork any value. That's wishful thinking. – one cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges).
A day earlier, Do Kwon, the founder and CEO of Terraform Labs, proposed an updated recovery planfor Terra after the collapse last week. Kwon suggested forking the Terra blockchain and distributing 1 billion tokens to stakeholders.
Kwon wrote:
“The Terra community must reconstitute the chain to preserve the community and the developer ecosystem.”
Zhao, however, was not too excited about and noted that minting coins does not create value. But merely dilutes the existing coin holders. Incentives are just a bootstrap mechanism, he added.
The Binance CEO also raised a question about where the Luna Foundation Guard’s bitcoin reserves are. He said: “Shouldn’t those BTC be ALL used to buy back UST first?”
More than $1.2 billion in BTC reserves remain unaccounted for by the Luna Foundation Guard. It accumulated more than $2 billion in bitcoin reserves to support UST and provided a loan of $750 million in bitcoin. The rest remains unaccounted for. Additionally, 9,658 bitcoins (worth more than $288 million at current prices) also remain unaccounted for.
Last week, UST lost its peg to the US dollar, putting incredible pressure on LUNA to keep its price up. Because of the way the two tokens were designed to interact, this led to a huge supply increase in LUNA and a resultant price crash.
Binance Labs was an early backer of Terraform Labs, having co-led its $32 million seed round in 2018. Other larger investors include Coinbase Ventures, Polychain Capital, Pantera Capital and Hashed.
