- Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, expressed disappointment with how Terraform Labs handled the recent collapse of LUNA and UST.
- CZ: “We asked your team to restore the network, burn the extra minted LUNA and retrieve the UST pin,” he tweeted. “So far, we haven’t gotten any positive feedback or any feedback at all.”
- He compared Terraform’s response to that of Axie Infinity, the project that was hacked for $622 million in March 2021, praising the latter for its responsibility at the time.
In a Twitter thread, the head of Binance shared his disappointment with how the Terraform Labs team handled the collapse of their ecosystem.
Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, expressed disappointment with how Terraform Labs handled the recent collapse of LUNA and UST.
CZ said that the team behind the Terra network barely responded to Binance’s request to help them restore the network.
5. I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team. We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response, or much response at all
— CZ 🔶 Binance (@cz_binance) May 13, 2022
He compared Terraform’s response to that of Axie Infinity, the project that was hacked for $622 million in March 2022, praising the latter for its responsibility at the time.
“This is in stark contrast to Axie Infinity, where the team took responsibility, had a plan, and communicated with us proactively,” added Changpeng Zhao. “And we help.”
On March 23, Ronin, an Ethereum sidechain developed for the game Axie Infinity, was hacked.
Hackers were able to drain 173,600 ETH and 25.5 million USDC from the bridge, culminating in one of the largest hacks in industry history with total funds lost of $622 million.
Earth’s Collapse
The Terra ecosystem is made up of a native token called LUNA and a native stablecoin called UST. UST is an algorithmic stablecoin governed by smart contracts, with LUNA acting as an arbitrage cushion to help UST maintain parity with the dollar.
Users could exchange $1 worth of LUNA for UST and vice versa. If the price of UST rises above parity, people can exchange $1 worth of LUNA for UST and sell the newly minted UST for a profit.
However, since last week, the UST stablecoin has decoupled, hitting an all-time low of $0.050 today at 1:00 AM UTC, according to data from Coinbase. The sudden drop in the price of UST created a huge arbitrage opportunity.
The opportunity created tremendous selling pressure for LUNA, causing the coin to lose 100% of its value in less than a week. LUNA is currently trading at $0.000083, a massive drop from its all-time high of $119.18 recorded last month according to CoinMarketCap data.
