Binance stops trading UST and LUNA
In the early afternoon, Binance CEOChangpeng Zhao, tweeted to provide an update on the dramatic situation relating to the ecosystem of Terra (LUNA). In particular, we learn that UST/BUSD and LUNA/BUSD trading pairs have been suspended.
1.At #binance we prioritize user protection. We made the decision to suspend LUNA and UST trading. Here’s why.
A thread 👇
— CZ 🔶 Binance (@cz_binance) May 13, 2022
Changpeng Zhao mentions a first problem: a exponential number of LUNA tokens created (minted) as a result of depeg (loss of benchmark value) of the UST, which automatically led to a fall in its value on the market.
This is also the reason why the 2 cryptocurrencies drag each other into a bottomless pit: the LUNA will continue to lose its value. until the UST recovers its value of 1 dollar.
In short, over a week, the number of LUNA tokens in circulation increased by +49,293%.
Number of LUNAs in circulation from May 7 to today
However, as Changpeng Zhao points out, not all users are necessarily aware that the LUNA is currently in an endless spiral. Also, in order to limit the damage, trading of these 2 assets has been suspended on the largest cryptocurrency platform in the world.
But that was short-lived: a few hours later, an announcement was made in order to warn that the trading of these pairs will be restored at 4:30 p.m.. A rather significant contradiction between the declaration of the CEO and that of the platform therefore, especially insofar as no additional precision has been provided.
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Terra’s strategy strongly criticized by CZ
The CEO of Binance, through this tweet, did not fail to let people know what he thought of the strategy (or precisely its absence) from the Terra team.
A priori, Binance would have contacted the developers of the blockchain in order to offer them solutions to reinstate the peg of the dollar on the UST:
“I am very disappointed with the way this UST/LUNA incident was handled (or not) by the Terra team. We had their team restore the network, burn the excess LUNAs, and recover the UST peg. So far, we have had no positive response, or no response at all. »
He then made the parallel with Axie Infinity, whose Ronin sidechain was hacked for $620 million lately. At the time, CZ had praised the communication and responsibility of the teams in charge of the project, who had suffered one of the most important hacks in the history of cryptocurrencies.
“The contrast is stark with Axie Infinity, where the team took responsibility, had a plan and proactively communicated with us. And we helped. »
On their side, Terra teams give very little newsnot to mention Do Kwonthe founder of Terra, has been off the radar since May 11.
👉 To read also: Blockchain suspended again, Do Kwon threatened, LUNA at $0.001… Update on Terra this morning
Data source: Messari
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