Changpeng Zhao (aka “CZ”), Binance Co-Founder and CEO, provided his newest opinions on the recent failure of one of the crypto space’s most high-profile projects.
“The recent blowup in the Terra ecosystem has been one of the most impactful events in the history of crypto – comparable with the collapse of Mt. Gox in 2014 and the sharp market crash in January 2018 and March 2020,” according to leading digital asset market data provider CryptoCompare in an excellent comprehensive report (titled: “Exploring UST’s Fall From Grace”).
Binance Labs “spent $3 million USD in Terra (the layer 0 blockchain) in 2018,” yet stablecoin TerraUSD ($UST) did not exist at the time, and Binance did not “participate in the second round of Luna’s fundraising” or “acquire any UST.”
Over the last four years, Binance Labs has “invested in hundreds of initiatives, including exchange ‘competitors’ and various ‘competing’ blockchains.” A few have “fallen by the wayside,” while others have “found great success.”
Binance “worked hard to serve the Terra community” over the “past several days.” He attempted to address several topics in his tweets based on his understanding of the situation.
He wants Terraform Labs to provide “far more” transparency, “including particular on-chain transactions (txids) of all the monies.”
Although “failures can/will occur,” “transparency, quick communication, and taking responsibility to the community” are “very crucial.”
Whatever solution is ultimately picked, Binance is prepared to “help the community” in any way it can.
And yesterday, Binance CEO Changpeng Zhao, who claims to have never held any $UST, advised that any remaining $BTC reserves be used to purchase back $UST first.
According to the above-mentioned, the repercussions of the $LUNA / $UST issue for the crypto ecosystem are as follows:
The digital asset area is unquestionably in a bear market going forward.” The Terra ecosystem has been demolished – all projects that received funding in LUNA or UST will cease or be in disarray for the foreseeable future. Terra was once the second-largest by Total Value Locked (TVL) just behind Ethereum (with a high TVL of $21.7 billion on).
Also Read: As LUNA Price Free Drops, Terra Co-Founder Discloses a Rescue Strategy
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