Terra (Luna) Binance CEO Changpeng Zhao, who defined the ecosystem as a shallow concept, spoke again about what happened.
CZ said there were no ‘big solutions’ that could please everyone affected by the crash.
CZ said the LUNA’s growth was hollow, causing the inflated bubble to burst. He also stated that the collapse would have been preventable if there had been a faster response.
“LUNA Token Hits Made The Problem Worse”
Binance CEO has described Terra’s design as “silly”, based on the theory that printing more of an asset will increase its market value.
He added that printing money does not create value, it only weakens existing owners:
“Printing the LUNA token at such a rapid rate made the problem much worse.”
“Terra Collapse Could Have Been Prevented”
CZ also claimed that the collapse of the LUNA token could have been averted with an appropriate intervention:
“While Terra is an ecosystem with some uses, the growth rate of the ecosystem has not matched the speed of the incentives used to attract new users. If the Terra team had used their reserves when the depeg rate was 5%, this whole incident could have been avoided.”
CZ said the Terra team has been slow to use its reserves to restore the fixed price of $1.
Binance CEO stated that after the value of the Luna token has already dropped by 99%, the team is trying to use $3 billion to do a recovery.
“Cryptocurrency Ecosystem Resilient”
CZ said he is pleased with the resistance shown by the crypto industry. He stated that resilience is an important distinguishing element that people who are accustomed to centralized systems often do not understand.
“In a decentralized system, all stablecoins work in different ways. There are no common standards or reserves. However, when one fails, the others are less affected. Even without support, all other major stablecoins have withstood the shock and most other crypto projects are doing well.”
*Not investment advice.