In the wake of Terraform Labs’ demise, Binance CEO Changpeng Zhao slammed the company’s handling of it.
Zhao provided an explanation for Binance’s decision to cease LUNA and UST trade in a series of tweets on Friday in response to an earlier notice on the exchange’s website. Terra’s algorithmic stablecoin process, according to Zhao, had caused an overabundance of LUNA minting, and validators on Terra’s network had put a stop to it. In his post, he said that some of his users had begun buying back into LUNA, not realising that there were vast volumes of freshly generated tokens outside the exchange and that this would likely cause the price to plummet much lower. Trading was halted “as a result of these considerable dangers”
While Binance is generally “neutral” on crypto projects, Zhao has some thoughts on Terra’s crisis management. He penned the following:
“I am quite dissatisfied with the Terra team’s handling of the UST/LUNA affair.” To repair the network, we asked their team to burn the additional minted LUNA and retrieve the UST peg. As of yet, we’ve received neither a good nor a significant reaction.”
According to Zhao, the Axie Infinity developer “took responsibilities, had a strategy, and were talking with [Binance] proactively” in comparison to Sky Mavis’ handling of the $550 million Ronin Network attack in March. Zhao: Earlier last week, Zhao warned about the Terra situation and the dangers of algorithmic stablecoins.
Terra Is Doomed to Perish
Due to an oversupply of tokens, Terra has fallen into a death spiral over the past several days. UST has lost its peg, and LUNA has fallen below one cent. Approximately $30 billion in value was lost during the collapse, which has been dubbed one of the most significant in crypto history.
This week, Terraform Labs, the firm behind Terra, has come under fire for not restricting LUNA minting in the wake of the incident. There was a list of emergency steps provided by Terraform Labs on Thursday, but by that time, LUNA had already fallen. A few hours later, Terra’s validators again suspended the chain to avert a governance assault when its market value dropped.
Because Terraform Labs’ outspoken CEO, Do Kwon, has been so public about the project’s enormous potential in the past, he’s taken considerable credit for the catastrophe. The price of LUNA continued to decline, and Kwon delivered an urgent public message to his Twitter followers on Wednesday, claiming that “Terra’s return to form will be a sight for everyone to see.” As a result, he’s remained mute ever since.
This week, Crypto Briefing has made many attempts to contact Kwon and Terraform Labs in order to get their take on the recent events, but so far has not received a response.
In current trade, UST’s peg is trading at about $0.08. LUNA’s market value is presently less than a tenth of a penny, with a valuation of roughly $6.5 million.