Binance CEO Says Hardfork of Terra Blockchain Won’t Work, Demands More Transparency

UTC by Bhushan Akolkar · 3 min read
Binance CEO Says Hardfork of Terra Blockchain Won’t Work, Demands More Transparency
Photo: CZ / Twitter

Binance CEO CZ says that there’s open to working with the Terra community but demanded more transparency on the recent events. “Minting, forking, don’t create value. Buying back, burning does, but requires funds,” he added.

The last week’s collapse of the Terra ecosystem was devastating for the entire crypto community. Key industry players have expressed their opinions on what measures could help Terra restore the lost grounds. Some industry players suggested the idea of Terra hardfork and providing a new version of LUNA to all holders based on the snapshot of the Terra blockchain prior to the collapse. Binance CEO Changpeng Zhao said that this idea won’t work for Terra.

He wrote:

“This won’t work. Forking does not give the new fork any value. That’s wishful thinking. One cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges)”.

On Sunday, May 15, Zhao further shared a series of tweets wherein he addressed some rumors about Binance’s investments in Terra. CZ wrote: “Binance did not participate in the 2nd round of Luna’s fund raising nor did we acquire any UST. Binance Labs invested $3m USD in Terra (the layer 0 blockchain) in 2018. UST came much later after our initial investment”.

He further added that Binance has been investing in several projects over the last few years. CZ says that some bets have paid off well and others didn’t. “That’s how investments work,” he added.

Binance Extending Support to the Terra Community

CZ added that over the last few weeks, they have been extending support to the Terra community. But he demanded that we need to address the elephant in the room. Sharing his personal opinion on the idea of hardfork, he added: “Minting, forking, don’t create value. Buying back, burning does, but requires funds. Funds that the project team may not have”. CZ added:

“In this regard, I would like to see more transparency from them. Much more! Including specific on-chain transactions (txids) of all the funds. Relying on 3rd party analysis is not sufficient or accurate. This is the first thing that should have happened”.

However, everyone’s is currently asking as to what happened to the $3.5 billion Bitcoin reserves of Terra. Blockchain analytics tracking tools provider Elliptic said that the next day that UST started falling, the crypto wallets holdings and the BTC reserves were emptied. The Luna Foundation Guard reportedly moved its BTC reserves to crypto exchanges Gemini and Binance.

Apart from Binance, other players have come forward to help Terra community members. Ryan Wyatt, CEO of Polygon Studios said that they seek to help Terra-based projects migrate to the Polygon blockchain. He wrote:

“We are working closely with a variety of Terra projects to help them migrate over swiftly to @0xPolygon. We will be putting capital and resources against these migrations to welcome the developers and their respective communities to our platform and will be sharing more soon.”

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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