© Reuters
Investing.com – A few days ago, the Binance cryptocurrency exchange announced that it was permanently halting trading on and (Luna) and that only payments from these cryptocurrencies would still be possible.
The CEO of the crypto exchange, Changpeng Zhao, regrets these circumstances, because from his point of view, the Terra network was one of the most important projects within the crypto industry. But the collapse is now driving down confidence across the sector.
Binance had itself invested US$3 million in the development of Terra in 2018. However, this was only one of hundreds of projects the exchange has participated in, as the CEO explained:
“Binance however did not participate in the 2nd round of Luna’s fundraising, nor did we acquire UST. Binance Labs invested $3 million in Terra (layer 0 blockchains) in 2018 UST only came much later, after our investment.
Binance Labs has invested in hundreds of projects over the past 4 years, including “competitors” from the stock exchange and many other blockchains. Some have been left behind, but others have been extremely successful. That’s how investments work.”
From his perspective, it is now immensely important to the future of Terra that a lifeline be thrown to Luna investors. But that’s only possible if Luna’s supply is drastically reduced. The two variants that come into play for this are on the one hand the repurchase and on the other hand the incineration of the excess supply, as Zhao stated:
“Over the past few days, we’ve been working hard to support the Terra community. In my tweets, I’ve simply pointed out potential issues that I believe arise. Minting and forking don’t create value. Buyback and incineration are, but that requires money. Funds that the project team may not be able to afford.”
By Marco Oehrl