Describing the Terra LUNA ecosystem as a shallow concept, Binance CEO Changpeng Zhao on Friday further spoke about the crash. He said there are ‘no great solutions’ that can please everyone who were affected by the meltdown.
CZ said Terra’s growth was hollow and that led to the bubble burst. He indicated that the collapse was avoidable had there been a quicker response.
The Binance CEO termed Terra’s design flaw ‘most stupid’ over the theory that minting more of an asset would increase its market cap. Printing money does not create value, it just dilutes existing holders, he added. “Exponentially minting LUNA made the problem a lot worse.”
Terra Crash Was Avoidable
“While Terra did have an ecosystem with some use cases, the speed of growth of the ecosystem did not match the speed of the incentives used to attract new users. The entire incident may have been avoided if the Terra team had used their reserves when the de-peg was at 5%.”
He said the Terra team was slow in using their reserves to restore the peg. They tried to use $3 billion to do the rescue after the value of the coins had already crashed by 99%, he stated.
‘Resilient Crypto Ecosystem’
CZ said he was pleased by resilience shown by the crypto industry. He said the resilience was a key differentiator generally not understood people who are used to centralized systems.
“In a decentralized system, all the stablecoins work in different ways. There are no common standards or reserves. However, when one fails, the others are less affected. Even without bailouts, all other major stablecoins withstood the shock, and most other crypto projects are fine.”
Speaking about the impact of the crash, he said there were shockwaves sent throughout the entire crypto ecosystem. Many crypto projects were and are still negatively impacted in many ways, he said.
- After Vauld Suspends Withdrawals, These Crypto Exchanges Could Be Next
- Cardano’s Vasil Upgrade Goes Live On Testnet; When Will It Be Lauching On Mainnet?
- How Stable Is Tether? Data Shows USDT At Massive Liquidity Imbalance
- As BTC Plummets to $19,000, Elon Musk’s Tesla Reports $440 Million Impairment Losses
- British Army Regains Control Of Their Hacked Social Media Accounts Promoting Crypto Scams
- Bitcoin Miners Likely Behind Crash Below $19K, Here’s Why
- India’s Crypto Exchanges In Trouble? 1% Tax Keeps Traders Away
- Crypto Exchange KuCoin Denies Rumours of Them Halting Exchange Withdrawals
- Elrond Price Jumps By 9% Over This Announcement
- XRP Holding Better Than Most Altcoins, Here’s Why
- Polygon Price Analysis: $0.45 Fallout could Plummet MATIC price by 25%
- ETH Price Analysis: Can $1000 Support Undermine Selling Momentum?
- BTC Price Analysis: Technical Indicator hints Upcoming recovery for Bitcoin
- CRV Price Analysis: Buyers Prepare To Boost CRV Prices To $1
- DOGE Price Analysis: Pullback Opportunity Eyes its Next Jump to $0.1
- Sandbox Price Analysis: Emerging Pattern May Soar SAND price by 20%
- Polygon Price Analysis: V-top Reversal may Direct MATIC to $0.31 Support
- ETH Price Analysis: Is Ethereum Dropping To Three Digits?
- Bitcoin Price Analysis- BTC on Losing Streak Nearing $17800; Will it Hold?
- NEAR Price Analysis: Falling Prices Eye $3 Breakdown; Should Coin Holders Worry?