Ethereum’s Founder Vitalik is Critical of UST and LUNA

Ethereum’s Founder Vitalik is Critical of UST and LUNA

Vitalik and CZ Have Some Thoughts on Terra’s Demise

Ethereum founder and Binance CEO have criticised Terra. The premise of UST itself.

In the aftermath of last week's historic collapse of Terra's stablecoin, UST, and native token, LUNA, crypto leaders have emerged to offer their perspectives.

Vitalik Buterin, creator of Ethereum, says the entire premise of UST is misleading and inherently flawed.

Previous to this week, Terra ensured that investors would always be able to access UST, by providing a stable value of 1.0 UST for 1 Terra. Kwon has kept his Twitter bio for many months, stating he is a "Master of Stablecoin".

Buterin thinks that algorithmic stablecoins and asset-backed stablecoins are very different.

After days of uncharacteristic silence, Do Kwon has come up with a new plan to revive LUNA. The idea includes abandoning UST permanently and resetting LUNA to a 1 billion token circulation, with tokens to be distributed to both former holders wiped out by last week's events, and to current holders.

Within hours, the CEO of Binance, the world’s largest cryptocurrency exchange, said such a plan is dead-on-arrival.

Zhao made an exception yesterday to tweet that "forking" LUNA won't work.

Forking is a mistake. If you are going to fork, then you should at least get some value out of it.

Forking a coin does not give the new coin any value. This is wishful thinking.

The snapshot process will not work if there are any transactions on the blockchain after the snapshot is taken. So, there is a risk that old transactions cannot be reverted.

Where's all the BTC that was supposed to be used as reserves?

I fail to see the problem with this. Minting coins (printing money) doesn't create value. It just dilutes the existing coinholders.

Zhao went further, openly questioning the transparency of Kwon and Terra’s handling of the crisis sparked by UST and LUNA’s collapse. Kwon claimed earlier last week that billions in stockpiled Bitcoin had been deployed by Luna Foundation Guard (LFG), Terra’s overseeing nonprofit, to save UST.

Blockchain data revealed that LFG did in fact send billions in Bitcoin last week to accounts at Binance, and Gemini. But it remains an open question as to whether those reserves actually were sold to buy USDT.

“Where is all the BTC that was supposed to be used as reserves?” Zhao wanted to know.

Binance delisted LUNA and UST, then later suspended trading for them, only against Binance's own stablecoin, BUSD. I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team.

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