Binance CEO believes hard fork to TERRA2 won’t help Terra

The proposal of hard forking the Terra blockchain to resurrect the once-thriving LUNA and UST ecosystems was recently questioned by CZ.
The proposal of hard forking the Terra blockchain to resurrect the once-thriving LUNA and UST ecosystems was recently questioned by CZ.

The proposal of hard forking the Terra blockchain to resurrect the once-thriving LUNA and UST ecosystems was recently questioned by Changpeng “CZ” Zhao, the CEO of crypto exchange Binance. Following up on that, CZ shared his thoughts on the best course of action for collapsing crypto ventures with the crypto community.

“This won’t work,” CZ stated, dismissing the validators’ proposal for a hard fork to TERRA2, which would involve distributing a new version of LUNA to all holders based on a snapshot of holdings taken before the market collapsed. “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 should first spend its Bitcoin (BTC) reserves to repurchase UST in order to restore pegging. Notably, Luna Foundation Guard or LFG has stated that it is planning to compensate UST holders after their funds have burnt to ashes.

“Minting, forking, don’t create value,” CZ remarked, pointing to the possible problems with Terra forking. However, he said that buying back and burning the token would be effective ways to restore its market value. While expressing his support for the Terra community, CZ emphasized the necessity for “far greater transparency from them,” which includes information regarding particular on-chain transactions (transaction ids) of all funds: “Failures can/will happen. Transparency, prompt communication, and taking responsibility for the community are critical when they do.”

FTX CEO supported transparency of Terra 

The continuous tweets and responses by Terra founder Do Kwon made the CEO of the crypto exchange giant FTX, Samuel Bankman-Fried (SBF), praise him. He recently tweeted, noting how Kwon stood by the community and added that the CEO never misinterpreted LUNA/UST mechanism. 

Binance CEO Changpeng Zhao also discussed the possible solutions to the LUNA/UST disaster. He expressed his hopes that Terra can rebuild itself “in a proper and sensible way.”