To gain deeper insights into the LUNC and Terra Classic ecosystem, let's explore a curated collection of tweets from Changpeng Zhao (CZ), former CEO of Binance. These tweets offer valuable perspectives on the events surrounding the LUNA/UST crash and the subsequent developments within the Terra Classic community.
We will start with CZ's Tweets from when the LUNA/UST crashed on 13th May 2022. Here was a thread describing why Binance suspended LUNA and UST trade on 13th May 2022.
1. At #Binance we prioritize user protection. We made the decision to suspend LUNA and UST trading. Here's why.
2. An exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol. Their validators have suspended their entire network, resulting in no deposits or withdrawals possible to or from any exchange.
3. Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading.
4. While #Binance always aims to be neutral, helpful and protective of all users and industry peers, and we typically refrain from commenting on other projects, I will break that rule this time.
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
6. (This is in sharp contrast to Axie Infinity, where the team took accountability, had a plan, and were communicating with us proactively. And we helped.)
7. We know there are different opinions in the community, we felt suspending trading is the best way to protect our users at this time. We will continue to monitor the situation closely 24/7. All actions will be announced on @binance. đ - CZ
Was in a no-phone meeting for 2hrs. At least, there is progress.
Luna blockchain resumed, no more minting.
And deposits, withdrawals and trading resumed. Trading is important for existing holders.
Please do NOT buy a coin just because trading is on. DYOR! EXTREME caution!
Many people don't get this point. If we didn't push the issue, the Terra blockchain may still be in "halted" mode, or worse with super minting...
Then, just two days after the crash with this thread to exaplain more that Binance had been keeping in touch with Terraform Labs, but they were not happy with the management.
1/8 These past weeks have proven to be a watershed moment for the crypto industry. We have witnessed the rapid decline of a major project, which sent ripples across the industry, but also a new found resiliency in the market that did not exist during the last market downswing.
2/ First, I need to address falsehoods circulating in crypto twitter.
3/ Binance did not participate in the 2nd round of Lunaâs 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.
4/ Binance Labs invested in hundreds of projects over the last 4 years, including exchange âcompetitorsâ and many âcompetingâ blockchains. A few of them have fallen by the wayside, but a few have been extremely successful. Thatâs how investments work.
5/ The last few days, we tried hard to support the Terra community. In my tweets, I am simply pointing out the potential issues from my understanding. Minting, forking, donât create value. Buying back, burning does, but requires funds. Funds that the project team may not have.
6/ 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.
7/ I am not always right, but my perspective is: Failures can/will happen. But when they do, transparency, speedy communication and owning responsibility to the community is extremely important.
8/ I am just hoping that the project teams can rise from the ashes and rebuild in a proper and sensible way. Regardless of my personal views, or the solution chosen in the end, we will always be here to support the community in any way we can.
Then, 3 days after the crash with another thread. Terra blockchain was a top 10 crypto right before the crash, so it was important and expected from the crypto all-father to care about the blockchain, and more importantly the users.
1/5. Some interesting updates, full transparency and lead to protect users:
As it turns out, most UST pairs were 0 fee to begin with. (I didn't know that, our team had to tell me.) So, not much UST there.
We do have...
2/ Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak. It still sits on the address we received at đ. Never moved or sold.
Address:
https://finder.terra.money/mainnet/address/terra19scdgmvhj5rl7f66n06z5pescf0gmeysw6pjrz
3/ On this same address, we have about $12,000,000 UST from staking over time (not bought). Also never moved or sold.
4/ Now the important part.
To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever.
Binance (after a 5 min discussion) fully support this proposal. đ
5/5 Protect users.
I did ask about this, and know now. But we still have user privacy to respect. The Terra team need to disclose it on their own. They are just so slow in communicating with the community.
Then, 4 days after the crash with this famous Tweet from a crypto billionaire, Poor again.
Poor again.
https://fortune.com/2022/05/16/binance-luna-terrausd-ust-stablecoin-retail-investors-crypto-crash/
Unfortunately, that article on Fortune.com was taken down some time later. However, it was an article about Luna crash.
Then, 6 days after the crash, CZ did care about builders so much that he offered them jobs on BNB chain.
#BNB Chain offers another lifeline to Terra ecosystem projects
https://cointelegraph.com/news/bnb-chain-offers-another-lifeline-to-terra-ecosystem-projects
Four months later, Terra Classic blockchain resumed and running, with huge community behind it. This time the community has come up with Proposal #3568: 1.2% Burn tax that will burn 1.2% of every transactions both on-chain and off-chain in order to reduce LUNC supply down to manageable supply.
After our attempt to ask Binance to help burning, we were able to get on CZ's AMA on X.com to ask to implement the burn tax. However, CZ declined because all CEXes need to apply the tax together at the same time in order for it to work, which was the very reasonable.
However, that event developted to Binance's monthly burn from trading fee afterwards. And together with BNB, LUNC is the only two coins that Binance burn. You can also track LUNC burn here on our tracker.
LUNC Burn and Binance | Binance Blog
https://www.binance.com/en/blog/from-our-ceo/lunc-burn-and-binance-273938507093690497?hl=en
I feel bad for the people who hold LUNA or LUNC, but it doesn't mean other traders should pay for it, unless they agree (vote) to it.
A small few: if you donât force 1.2% tax on all your users, u r centralized/greedy.
Me: I believe the opposite. Forcing a tax is âcentralizedâ, high tax is greedy. We protect our users. We let our users choose. We are firm on this principle.
1/2
Expecting to get some attacks for this, but we stay transparent, involved, and open with our approach. đ
2/2
They don't realize, it won't work. Whales are not going to trade with 1.2% tax.
We are letting OUR users vote for it. Move your LUNC to @binance to participate. Otherwise, it feels a bit like letting citizens of one country vote for taxes in a different country. No?
» Binance To Implement Terra Classic (LUNC) Burn Mechanism
Quick thread on what weâre doing and why below.
Since my AMA on Friday, weâve had a number of discussions about how Binance can better support the LUNC communityâs requests for TX tax burns.
The last thing I said was we will implement an opt-in button. This has since changed. âOldâ blog for reference.
https://www.binance.com/en/blog/from-our-ceo/lunc-burn-and-binance-273938507093690497?hl=en
Three things here:
1) The LUNC community wasnât happy with this approach.
2) Itâs going to take a while to develop.
3) Itâs not going to work anyway. Our traders wonât vote for it.
Since then, we were discussing a better, quicker way to support the community.
Instead, we have decided to begin burning all trading fees collected on the LUNC/BUSD and LUNC/USDT spot and margin trading pairs on Binance.
Fees will be converted to LUNC then sent to the burn address. The burn is paid at our expense, not the usersâ.
This way we can be fair to all users. The trading experience and liquidity remain the same, and Binance can still contribute to the supply decrease of LUNC, which is what the community wants.
Then, one month later, A reply to Coindesk 2022 ranking that CZ didn't get on top list, but Do Kwon was there. This does not involving with LUNC at all, but still made our list since we list everything including mentions.
I am not influential. Rankings are not important. Do Kwon got there, though, haha.
Six months after the crash, that was when binance liquidated FTT from FTX court case. He compared it to LUNA case. However, LUNA (now LUNC) was never liquidated. That shows something!
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
I didn't say that. It was a question, not a commitment. I think we will stay in the free market.
We still hold LUNA (now LUNC) today. đ
I didnât they would go down in 24 hrs, we would have sold long ago if we knew, right? Still holding a bag of FTT and LUNA.
To the best of my memory, I never talked with Do Kwon directly. Not 1:1, not in a conf call together. Our team handled all the communications with them.
Binance had over a billion dollar withdrawals on that date, and could process transactions smoothly. However, what did CZ processed during LUNA crashed?
Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in. đ€·ââïžđȘ
Then, the famous Tweet about LUNA/UST idea of Do Kwon.
Do Kwon actually had the right idea, but just failed miserably on execution.
The general idea of Algo stablecoin. Not the details.
And, the last Tweet about anniversary.
A year ago today, UST/LUNA crashed. $40 billion in value gone. BTC went from 28k to 19k. A few lessons can be learned.
By analyzing CZ's tweets, we can gain valuable insights into the LUNC and Terra Classic ecosystem. These tweets provide a glimpse into the industry's perspective on the project's challenges and potential.
It's important to note that the cryptocurrency market is highly volatile, and past performance is not indicative of future results. As an investor, it's crucial to conduct thorough research and consider multiple perspectives before making any investment decisions.
Remember to stay informed about the latest developments in the LUNC and Terra Classic ecosystem by following official announcements, community discussions, and industry news.
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