CZ stated in CZ’s FAQ 8 “LUNA/UST is not a scam, it just has a stupid design flaw”
Recently, Binance received a lot of inquiries from the crypto community about the collapse of LUNA/UST. To answer those questions as well as issues related to cryptocurrencies and BSC, on May 21, 2022 Binance held a Reddit AMA.
CZ publishes articles that answer frequently asked questions about LUNA/UST
Prior to the Reddit AMA, CZ published an article on the Binance Blog to answer some of the questions previously received by the community, including an article about LUNA/UST. Specifically in the article, CZ expressed his opinion: “The most stupid design flaw is thinking that minting more of an asset will increase its total value (market cap). Printing money does not create value; it just dilutes existing holders. Exponentially minting LUNA made the problem a lot worse. Whoever designed this should have their head checked.”
According to CZ, the collapse of LUNA/UST is also due to confusion about the concept of “income”. Income as revenue should be more than expenses but it is possible that the project team included their token sale and valuation in the income and this is a flawed approach on their part.
During the Reddit AMA, when asked by a few people who pointed to Binance’s EARN UST product, it was emphasized that it was previously Secure and backed by Fiat. CZ frankly shared that they made a mistake.
Voting for the Terra (LUNA) hard fork proposal is still ongoing and will end on May 25, 2022. Although still receiving mixed opinions from the community, the price of LUNA has increased by 47.1% in the past 24 hours.
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