In an article on the platform’s official website, the CEO of Binance, one of the largest cryptocurrency exchanges, said that the past week was a difficult time for everyone due to the collapse of LUNA, saying that what happened to the Luna currency occupied most of the topics he discussed in his meetings and discussions And it will be an unforgettable lesson in the world of digital currencies.
In the published article, the CEO of Binance talked about the problems that LUNA faced and how to avoid these problems in the future, saying that protecting the affected users is what they care about most at the moment, but there are no great solutions that can satisfy everyone at the moment.
The CEO of the popular cryptocurrency exchange talked about the most stupid design flaw in LUNA is the thought that minting more cryptocurrencies will increase its market value, since printing money does not create value for it, therefore, minting LUNA coins significantly led to exacerbate the problem a lot.
Binance emphasized that everything was built on a shallow, enduring, self-concept, whereby the Terra ecosystem was rapidly growing and out of proportion to the speed at which incentives were being introduced used to attract new users. And Terra’s slow handling of the LUNA crash made matters worse, as the entire accident could have been avoided if they had used up their reserves when the loss rate was 5%.
He continued that after Luna’s value crashed by 99%, the team tried to use 3 billion dollars to save the currency, saying that in this case, it does not look like a scam, but it was just stupid, and that the Terra team should have always been very responsive. Operationally, and to communicate permanently and frequently with users, especially in times of crisis.
The Binance CEO believes that more guidance is needed on how to regulate stablecoins, give more attention to stablecoins, and not let a single failed company kill the entire industry, and move on.
The CEO mentioned many instructions that investors can take to reduce risks, such as diversifying the investment portfolio, and not putting all savings in one currency because it offers a high percentage of benefits, in addition to staying away from investments that offer high benefits, in addition to educating well in this the new World.