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.
