Changpeng Zhao: I support the Terra community, I have never held UST, and the hard fork will not bring any effect to Terra

Changpeng Zhao, CEO of cryptocurrency exchange Binance , recently questioned the idea of ​​hard forking the Terra blockchain as a means to revive the once-thriving LUNA and UST ecosystems.

Regarding the Terra community’s solution, Zhao Changpeng believes that the hard fork will not bring any effect to Terra. He wrote: “The fork will not bring any value to the new fork. That is wishful thinking. All transactions cannot be canceled after the old snapshot, including on-chain and off-chain (exchanges). Where are all the BTC that should be used as reserves? Shouldn’t those BTC be used to buy back UST first?”

“It’s not going to work,” he said, dismissing the idea of ​​validators hard forking TERRA2, which would include providing a new version of LUNA to all holders based on a snapshot of holdings before the market crash.

“Supply reduction should be done through burning. I don’t own any LUNA or UST either, just commenting,” Zhao Changpeng suggested.

He suggested that the Terra community should first use its Bitcoin reserves to buy back UST in order to restore its peg.

Zhao Changpeng pointed out the potential problems of forking Terra, saying that "coinage and forking do not create value, buybacks and burning are OK, but they require funds." While expressing support for the Terra community, Zhao Changpeng emphasized that "they need more transparency," including details about the specific on-chain transactions (transaction IDs) for all funds.

“Failures can/will happen. But when they do, transparency, quick communication and accountability to the community are extremely important. I just hope that the project team can rise from the failure and rebuild in a proper and sensible way,” he said.

Changpeng Zhao further clarified that Binance did not actively invest in Terra, nor did the company acquire any UST holdings, stating, “ Binance Labs invested $3 million in Terra in 2018 and did not participate in subsequent financing. Since UST appeared after Binance Labs’ investment, Binance did not acquire any UST either.”

Binance Labs, the investment arm of Binance, has invested in a number of projects over the past four years, which, according to Zhao Changpeng, have had varying degrees of success and failure.

Finally, Zhao Changpeng hopes that Terra can rebuild itself "in an appropriate and wise way." "No matter what my personal views are, or what the solution is ultimately chosen, we will always be here to support the community in any way we can."