Changpeng Zhao, CEO of the cryptocurrency exchange, Binance, also referred to as CZ, has expressed that he is skeptical of Terra’s attempt at reviving their ecosystem and their launch of their new LUNA token.
Zhao has said in an interview with CoinTelegraph that he, “(tries) not to predict what the community will do. […] Many are skeptical. I’m one of those guys.”
After the collapse of TerraUSD (USD), Terra’s ecosystem stablecoin, the CEO criticized their team for not handling the crisis correctly and even pointed out the project’s flaws that led up to the event. In spite of this, Binance is still participating in Terra’s revival plan by allowing the company to airdrop their new LUNA token to holders on their exchange.
Zhao made a point that in spite of the skepticism around Terra’s relaunch, Binance has a responsibility to help the users affected by the Luna crisis.
The CEO explained, “We still need to ensure continuity of people’s access to liquidity. […] We have to support the revival plan hoping that it may work.”
Further, according to CZ, the Terra situation should serve as a reminder and warning to projects that rely on experimental and unsustainable business models based on what he refers to as “aggresive incentives.”
As he pointed out, crypto projects such as Terra offer high yields to attract people in the hopes that once there are enough users, they will become profitable.
Zhao pointed out, “We should really look at them in a fundamental way to measure that more revenue, more income is generated than just an incentive payout.”