From riches to rags – Unfortunately, this has been the fate of many investors whose holdings were wiped out after the LUNA-UST catastrophe. Binance, the largest crypto exchange by volume, was also not impervious to the decline. CEO Changpeng Zhao indicated that the Binance’s original investment into LUNA and UST had declined substantially as the drama unfolded in the past few weeks.
Back in 2018, Binance injected $3 million into Luna and received 15 million tokens in return. Four years later, the tokens were worth $1.6 billion, nearly 560 times the original investment after LUNA hit its peak in April, Changpeng Zhao said on Monday. However, account details showed that Binance’s Terra investment was now down to $606 while its UST holding was down to $10,293 from an initial bag of $12 Million.
Changpeng Zhao’s suggestion in line with LFG’s plan
Despite the losses, the CZ Binance wanted retail investors to be compensated before Binance. He added,
“To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails [sic] users first, Binance last, if ever“.
Although CZ was critical of the way the Terra team was handling LUNA and UST’s collapse, his suggestion was largely in line with Terra’s proposal. Yesterday, the Luna Foundation Guard said that it would utilize $260 Million of reserves to repay the ‘smallest holders first’.
Terra’s Do Kwon proposed hard fork
Meanwhile, another recovery plan for UST, detailed by Terra founder Do Kwon, proposed forking the Terra chain into one that excluded algorithm stablecoins. He said that the new chain would be a fully-owned community chain called ‘Terra’ while the old chain would be known as ‘Terra Classic. Both chains would co-exist
However, despite the recent announcement, panic seems to remain among investors. Both LUNA and UST stretched losses on Tuesday amidst a risk-off market. The former was trading at a 25% discount at $0.0001771 while stablecoin UST was down to 12 cents at press time.