A new report claims that Do KwonFounder of TerraForm Labs and Earth LUNA/USDintentionally increased interest in Anchor Program from 3.6% to 20%, despite warnings.
What happened: Mr Ba designer of Terra’s docking protocol, leaked to Korean media outlet JBTC, on June 6, that Do Kwon anticipated Terra’s downfall. He further revealed that the designers had set the interest rate of the protocol at 3.6% because any test run at a higher percentage rate indicated TerraUSD USD/USD would fail.
Despite this, Mr. B said that Do Kwon had increased the stake to 20%, only to magnetize retail and institutional investors. Since the funds held by the company were not sufficient to meet the 20% interest rates promised to investors, Kwon essentially set this business up for failure. As the money poured into the UST, this algorithmic deficiency exploded, causing the inevitable crash.
Also see: Investors Sue Terra Founder Do Kwon: What You Need To Know
why it matters: The claim that Kwon may have been aware of the impending UST crash and failed to take precautions to avoid Terra’s collapse comes after investors lost $60 billion on the crypto. In the cited reportMr. B says: “Just before the launch, I suggested to CEO Kwon Do-hyeong to lower the interest rate, but it was not accepted.
Since the LUNA crash, a plethora of investors and media have questioned Kwon’s role in Terra’s downfall. Additionally, this new claim could lead to further legal action against Kwon.