Changpeng Zhao gave an update on the latest loss of one of the most well-known projects in the cryptocurrency sector on May 15th.
Binance Co-founder Talks About Terra’s Meltdown
One of the most significant occurrences in cryptocurrency history was the recent meltdown in the Terra network, CryptoCompare wrote in a complete analysis released on May 13th. On May 15th, Changpeng Zhao made a Twitter thread saying that even though Binance Labs put $3 million into Terra in 2018, the stablecoin TerraUSD (UST) didn’t exist yet, and Binance didn’t participate in Luna’s second round of funding or funding buy any UST.
More than a hundred initiatives have been funded by Binance Labs over the past four years—including several exchange adversaries and rival blockchains. A few have failed, while others have been enormously successful.
Binance has worked hard in recent days to support the Terra network. He attempted to address several topics in his tweets based on his scenario knowledge. More transparency is needed from Terraform Labs regarding on-chain transactions and the total amount of cash. It is critical to maintaining transparency, rapid communication, and a sense of personal accountability to the community despite the possibility of failure.
Regardless of the final result, Binance pledges to “help the community” in any possible. According to Binance CEO Changpeng Zhao, who claims to have never owned any UST, any leftover Bitcoin reserves should be utilized to purchase back $UST first.
CryptoCompare’s Thoughts on the Present Market Condition
According to the CryptoCompare study, the LUNA and UST fiasco has consequences for the cryptocurrency world: The future of cryptocurrency is unquestionably bleak. As of May 5th, LUNA and UST, two of the most popular cryptocurrencies in the world, have been delisted from the Terra network, which was once the second-largest by TVL, just behind ETH.
Everyone is expecting the environment’s market instability to take some time to decrease; and hope to learn the actual impact of this crisis in the coming weeks. Numerous ventures begun in recent years will fail if they don’t give long-term value and don’t have access to additional funding, particularly during the bullish season of the past 2 years.
As a result, it’s highly likely, if not certain, that crypto markets will continue to decline, especially in light of the current macroeconomic scenario.
However, these turbulent events have always occurred in the digital asset world. The latest price drops in ETH and BTC, which are over 50% below all-time highs, have happened before — the COVID-19 meltdown, the 2018 bubble burst, and the liquidation of Mt. Gox in 2014 are just a few instances.
Cryptos have weathered all of these storms before, and it’s expected that the same will happen this time. A large quantity of intellectual capital flows into virtual currencies from the banking system and web2.0 businesses, traditionally viewed as the most renowned industries for new graduates.
Indeed, the demand for a decentralized solution to established banking institutions is greater than ever. Financial markets and the actual economy are headed for a crisis as global inflation soars to levels not seen in 40 years and as interest rates rise in anticipation of a recession. A steady stream of backward-looking sectors would keep getting devoured by the digital revolution.
This drop might signal the start of a year-long bear market, during which developers would keep constructing and innovating new services in the field. The upcoming months could be a great chance for investors with a long-term time horizon (say, ten years or more).