Binance CEO Does Not Think Forking Terra is the Solution to LUNA and UST’s Woes


Summary:

  • CZ has expressed concerns over a proposal to fork the Terra chain to create new LUNA and UST digital assets
  • Binance CEO states that the new fork will not have value, and one cannot void all transactions after an old snapshot, particularly on crypto exchanges
  • He also questioned where all the Bitcoin reserves owned by the Luna Foundation Guard went
  • Do Kwon had earlier mentioned that the team at Terra is compiling a document to explain the flow of the LFG’s Bitcoin

The Founder and CEO of Binance, Changpeng Zhao, has expressed concerns about a proposal to fork the Terra Blockchain as a means of fixing the issues of UST’s massive depegging and LUNA’s subsequent inflation.

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According to CZ, such a move will not give the new fork any value and that it is ‘wishful thinking’. CZ also pointed out that one cannot simply void all transactions on a blockchain after an old snapshot, especially for trading transactions on crypto exchanges.

Proposal to Fork the LUNA Chain and issue New Digital Assets

Mr. Zhao shared his insights into the situation through Twitter and was part of a response to another Tweet that suggested that the final solution for the Terra blockchain was as follows:

  • Carrying out a hardfork of the Terra blockchain to Terra2
  • Undertaking a snapshot of all holdings before the collapse of UST
  • Issuing affected holders with new LUNA2 digital assets
  • Proceed to create a new, better chain with LUNA2 and UST2 digital assets
  • Create a pool to repay the old UST peg
Related:  Taking a deeper look into the UST-USD decoupling and how LUNA plummeted by 99%

CZ Questions Where LFG’s Bitcoin Went

In addition to pointing out that hard forking the Luna blockchain was not a good idea, CZ questioned where the Luna Foundation Guard’s Bitcoin went during the depegging of UST. According to CZ, the Bitcoin should have first been used to buy back UST. He also issued a disclaimer that he was not a current or past holder of UST.

He said:

Where is all the BTC that was supposed to be used as reserves?

Shouldn’t those BTC be ALL used to buy back UST first?

I don’t hold UST, never had. And I don’t know it too well. Usually busy with other things, but now dragged into this.

As to the whereabouts of the LFG’s Bitcoin, Do Kwon had earlier tweeted that Terra’s team was currently working on documenting the use of the BTC during the depegging event.

[Feature image courtesy of CZ on Twitter]




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