Binance CEO CZ Discusses Terra Collapse’s “Lessons”

By    24 May,2022

As he reflected on last week’s events, Zhao didn’t hold back in blasting the Terra team.


CZ Discusses Terra Once More

Changpeng Zhao has added to his ideas on Terra’s demise.

The Binance CEO, who has been harshly critical of Terraform Labs in recent days, released a new message on Friday reflecting on the events of last week, when Terra’s UST stablecoin lost its peg to the dollar, culminating in a $40 billion wipeout that impacted the whole crypto market.

Zhao outlined the disaster’s “lessons to be learnt,” sharing some of his personal takeaways and recommendations for bitcoin investors. He talked about Terra’s dual token structure, which was meant to allow LUNA to be produced anytime UST fell below the peg. “When you peg to one asset using a different asset as collateral, there will always be a chance for under collateralization or depegging,” he wrote. He then went after Terraform Labs for its tokenomics strategy. “Printing money creates no value; it simply dilutes current holders,” he stated. “Exponentially minting LUNA made the problem a lot worse. Whoever designed this should have their head checked.”




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