Binance CEO Changpeng Zhao said Terra’s blockchain rollback plan won’t work because the new chain won’t have any value.
“The fork will not give the new blockchain any value. This is wishful thinking. You can’t cancel all transactions after the old snapshot, both on and off the blockchain (exchange),” Zhao wrote.
Zhao’s tweet came a day after Terraform Labs founder and CEO Do Kwon proposed a plan to revive Terra. Kwon proposed a Terra blockchain fork and distribution of 1 billion tokens to interested parties.
However, according to Zhao, printing new coins does not create value, but merely dilutes existing asset holders.
Zhao also questioned where Luna Foundation Guard bitcoin reserves are located.
“Shouldn’t those BTCs be used to buy back USTs first?” he noted.
Luna Foundation Guard (LFG) had about 8,0394 BTC worth $3.5 billion, according to analyst firm Elliptic. When UST lost its peg to the U.S. dollar, the funds were transferred to the Binance and Gemini exchanges.
“We don’t see how these bitcoins are being used. They may have been sold, left on an exchange, or put back into a separate wallet,” the company said.
Binance Labs was one of the early backers of Terraform Labs, leading an initial $32 million funding round in 2018. Other notable investors in Terraform included Coinbase Ventures, Polychain Capital, Pantera Capital and Hashed.