In the wake of the Terra ecosystem implosion, Binance boss ChangPeng Zhao (CZ) commented, “this is what diamond hands look like,” about the 15,000,000 LUNA tokens Binance had received as part of the company’s $3 million investment in Terra.
At their peak, the tokens were worth $1.6 billion, but as of May 18, they are valued at roughly $2,740.
This is what diamond hands look like, the coins were never moved off the receiving address.
This is a non-trader hold strategy. If you adopt this strategy, you should also have some diversification. NFA. https://t.co/yRtAHlzHmz
— CZ 🔶 Binance (@cz_binance) May 17, 2022
Despite the scale of loss, CZ said Binance is willing to stand aside and have retail users compensated first part of its stance on protecting users.
Not financial advice
CZ disclosed the firm’s key dealings with Terra and the amount of LUNA it holds to increase transparency and “protect users.”
As well as revealing the firm’s LUNA holdings and relevant address, CZ also said Binance made $12 million UST through staking those holdings. But, as Binance charged zero fees on UST pairs, the firm made close to nothing on trading fees,
During the thread, CZ added that the priority during this difficult time is “protecting users.” For that reason, he has asked the Terra team to compensate retail users first.
4/ Now the important part.
To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever.
Binance (after a 5 min discussion) fully support this proposal. 👇https://t.co/QnMx8aZ09A
— CZ 🔶 Binance (@cz_binance) May 16, 2022
CZ picked up where he left off the following day with the “diamond hands” tweet. Although he moderated that comment by saying adopting this non-trader strategy is best with a diversified portfolio. Not financial advice.
CZ is doubtful about Terra’s recovery plan
CEO of Terraform Labs Do Kwon has put together a recovery plan to rescue what remains of the Terra ecosystem. Monday, May 16, Kwon tweeted details of the project, which involves forking into a new chain that does not have an algorithmic stablecoin element.
6/ The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called “Terra” (token Luna – $LUNA), and the old chain be called “Terra Classic” (token Luna Classic – $LUNC). Both chains will coexist.
— Do Kwon 🌕 (@stablekwon) May 16, 2022
However, CZ said the plan “won’t work” and expressed doubts that the new chain will hold value to the same degree as the old chain. To illustrate his point, CZ likened this strategy to forking Bitcoin at November 2021’s high and expecting that new chain to be valued at some $1.3 trillion.
“Do they really think they can fork BTC at the snapshot on Nov 18, 2021, and the new fork will have the new BTC at $68,000 [the price on that day]?“