Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

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The Anchor protocol was originally designed to offer an interest rate of 3.6%, but it was dialed down to 20% just a week before its release to attract more investors, a core developer told Korean media. The outlet had alleged in an interview with JTBC.

“I had no idea it would end up with such a high interest rate. Set at 20% just a week before release,” said the employee, referred to in the Korean-language report only as Mr. B.

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“I thought I was going to fall from the start. (I designed it), but it fell 100%.

Mr. B said the platform was designed to offer an interest rate of just 3.6% and was a key component of keeping the Terra ecosystem stable as it took into account the funds available in Anchor’s war chest.

Mr B, however, revealed that a week before the launch, developers discovered that plans had changed, giving investors access to a much larger 20% interest to lock their UST stablecoins in the Anchor protocol.

JTBC also claims that it obtained internal design documents created by TerraForm Labs, which it wrote about attracting investors with high interest rates.

The developer said that it attempted to raise the issue with Terra Luna founder Kwon Do-Hyung (Do Kwon) just ahead of its launch in April 2019.

“Just before the release, I suggested to CEO Kwon Do-hyung that the interest rate should be lowered, but it was not accepted.”

RELATED: Law Decoded, May 30-June 6: TERRA Results in China, Japan and South Korea

The dramatic decline of Terra (LUNA) and the algorithmic stablecoin UST follows a plan by the South Korean government to launch a new Digital Asset Committee in June to oversee the country’s crypto industry, responsible for policy formulation and supervision. .

Do Kwon has been called to attend a parliamentary hearing on the matter in South Korea in mid-May.

Court documents showed that he disbanded Terraform Labs Korea a few days before the Luna accident, after which he found himself in hot water.

In May, South Korean authorities reportedly issued subpoenas to employees of Terraform Labs, looking into whether there was intentional price manipulation and whether the tokens went through proper listing procedures.

Despite this, the Terra co-founder has managed to relaunch the collapsed network on May 28 with a new series called Terra 2.0 (Phoenix-1), aimed at the fallen Terra (LUNA) and TerraUSD (UST). ) is to be revived.