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Binance CEO calls Terra team’s decision “stupid”

Binance CEO, Changpeng Zhao, went on to share his views on the recent crash of the Terra ecosystem.

In a recent blog post, CZ noted that his focus is on protecting affected users on his platform, while emphasizing that all of the suggested solutions to get Terra working back all have errors.

Speaking about the lessons he learned from Terra’s horrific crash, CZ wrote that LUNA’s first design flaw was that the system could generate an infinite number of new tokens.

In his view, “Printing money does not create value; it just dilutes the existing holders.”

He continued that while Anchor’s 20% interest was used to fuel growth, the LUNA team was unable to generate the “income” to sustain it.

CZ also pointed out that Terra has a burgeoning ecosystem, however, the speed at which the ecosystem grows is not commensurate with the measures used to attract new investors.

He describes this type of growth as “empty” and advises investors to “don’t just chase high APY. Let’s look at the fundamentals. ”

According to the Binance CEO, the Terra team acted late in their efforts to restore the UST peg.

He noted that the crash could have been prevented if the Terra team had used their Bitcoin reserves when depeg was at 5%; instead, Terra waited until about $80 billion was wiped off the market before attempting to recover with $3 billion — a decision he called stupid.

In his view, the Terra team’s lack of open communication with the community also erodes investors’ trust in them.

Changpeng Zhao also said that he has “mixed feelings about the revival plans provided by Team Terra.”

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