Binance’s Zhao says Axie Infinity handled its crisis after the Ronin attack better than Terra did, saying he is disappointed in how the Terraform Labs team handled the collapse so let’s read more today in our latest Binance news.
Binance’s Zhao says Axie handled the crisis better and he is disappointed in the way of handling the UST and LUNA collapse. He said the team behind Terra hardly responded to Binance’s request and help them restore the network:
“We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response or much response at all.”
He compared Terraform’s response to the one of Axie Infinity project that was hacked out of $622 million back in March 2021:
“This is in sharp contrast to Axie Infinity, where the team took accountability, had a plan, and were communicating with us proactively. And we helped.”
Ronin as an Ethereum sidechain developed for the Axie Infinity game got exploited. The hackers were able to drain 173,600 ETH and 25.5 million USDC from the bridge and culminated in one of the biggest hacks in the industry with the total funds surpassing $662 million lost. The Terra ecosystem is composed of a native token dubbed LUNA and a stablecoin dubbed UST. UST is an algorithmic stablecoin that is governed by smart contracts with LUNA acting as an arbitrage cushion to help the stablecoin maintain its dollar peg. The users could swap $1 worth of LUNA for UST and vice versa. If the price of UST rises above the peg, people can swap $1 worth of LUNA for UST and sell the minted UST for a profit.
A week ago, the UST stablecoin de-pegged and hit an all-time low of $0.15 and the sudden fall in the price of UST triggered a huge arbitrage opportunity. The opportunity created a huge selling pressure for LUNA which resulted in the coin losing 100% of its value in less than a week. LUNA trades at $0.000024 which is a huge drop from the high of $119 recorded a month ago. The crash of Terra led to a temporary halting of its blockchain.