LUNA founder: I bet everything, but this time I lost
Original source: Coinage
Original compilation: Shenchao TechFlow
UST, the lost stablecoin of the USD Stablecoin, whose rise was fueled by one man: Do Kwon.
After 3 months, when the UST narrative gradually shattered, Do Kwon appeared in front of the public again. Now Do Kwon is rebuilding UST again, but almost from scratch. For most people, when people have doubts about his past, it is natural to disdain his future. So Coinage member Zack flew to Singapore to interview Do Kwon in his office and home for two days to find out if Terra's debacle was really just a failure, or a hoax.
Do Kwon revealed his heart to the public for the first time in front of the camera. He once thought he was very successful. On the night of UST’s collapse, he tried to raise $2 billion. Unexpectedly, the news leaked and short sellers quickly Squeeze,"I wanted to bet big, but I lost"...
Zack: How to rebut "UST is scam" view?
Do Kwon:I don't think the UST incident is an ethical issue, especially in an industry that requires a lot of technical background to understand . But it's very difficult to give a satisfying answer when everyone is in so much pain and anger.
Zack: The collapse of UST took only 72 hours, have you ever been surprised by the speed of the crash?
Do Kwon:I never thought this would happen. After this, I have been working hard to rebuild the ecology and the community, just like I have been doing for the past 5 years. I haven't found the right words to describe this feeling, many people in the community have lost their money, lives, savings... many projects built on Terra may have similar experiences, and it is likely that the situation will be more bad.
Zack: As the creator of all this, it's brutal.
Do Kwon: Obviously, in hindsight, many of the beliefs I held and the speculations I made were wrong.
Zack: I think trust is at the core. Ironically, the question that arises in many of these trustless systems like UST is, do you trust the people who created these trustless systems? What do you think you have to say in order for people to believe you?
Do Kwon: If it's all for personal gain, then it's probably the stupidest way to do it. Why gamble your entire reputation for 5 years, name your daughter Luna, and then become the most hated person on the Internet in short order? I think the only and best thing I can do is to be upfront about what happened and admit my mistakes.
Zack: When the Anchor protocol came out, its APR was not 8%, but 20%. It is said that at the beginning of its creation, some employees felt that 20% APY was a bit outrageous, which was much higher than the existing level.
Do Kwon: Actually, people’s internal consensus on interest rates is APR in the thousands of percent.
Zack: Is Anchor meeting your expectations that Anchor has ultimately captured almost $17 billion on this journey?
Do Kwon:I feel like every day, UST is stronger than the day before.
Zack: There is another operating strategy behind UST, which seems to be different from the original promise of UST and LUNA, which is an algorithm Stablecoins , which works perfectly without requiring a reserve. If starting with Bitcoin, by adding multiple types of collateral, UST has a real chance to become the decentralized of all cryptocurrencies Stablecoins. But I'm curious where this plan comes from. And what was your motivation at that time?
Do Kwon:We started doing this with Bitcoin because we believe it is the most Resilient, most unbiased digital currency. If we do some optimizations, such as related to economic stability, we will probably have enough reserves. I think on another level. I'm betting too much on Bitcoin. To be honest, I didn't expect it to fall so much. I know bitcoin is down 80% over time now but I was thinking the amount of economic output being created within the crypto industry at that time and the amount of people that have gone into the industry to start building it is unmatched . At that time, I wanted to try to build a product that was truly decentralized and extremely resilient, but I was wrong.
Zack: Let's take a look at the actual timeline when it happened. Do Kwon's twitter account looked pretty cool as UST decoupled slightly. And when things took a turn for the worse, Do Kwon started talking to the Terra team in person again, what happened that day?
Do Kwon: I was in Singapore at the time and I woke up in the morning and thought the Curve pool was out of balance because someone did A very big deal. So I think the original deal was like $84 million, and then I accumulated a few hundred million dollars in total to counter it. But as seen on twitter, sentiment started to get worse, and then more people started trading in Curve, and the selling pressure we saw started to get worse, so we started We raised 2 billion US dollars in the middle of the night to resist this impact, but the news leaked out, and we began to see a large number of empty LUNA orders, so the value of the Token we originally planned to sell has gone down.
Zack: What was the situation in the war room when the deal was not done?
Do Kwon: When I look back at the scene at the time, I don't think UST can't hook back, because you also need to know, I've been through crises like this many times before and always hooked back.
Zack: At what point did the discussion in the war room start to turn into "we tried everything and it didn't work"?
Do Kwon: When I went into a state of mild shock, I don't think I even noticed at the time, Because for the past few days, like most people in those places, we haven't slept at all.
Zack: How much sleep did you get that week?
Do Kwon: It was all night for several days in a row, I don’t really remember. I just didn't notice the passage of time. So even now, if you ask me what's going on during the day and what's going on at night, I can't tell because I barely get up from sleep, you know, it's all dark.
Zack: A lot of people in the Terra community talk about suicide and losing their life savings, and a friend of my co-founder's family also committed suicide. There are many stories like this, what would you like to say to the people affected by this?
Do Kwon: After the chain reaction stopped, I spent days on the phone calling many of the Terra communities I talked to personally For those who have lived, everything is difficult.
Zack: Have you ever thought about taking back some of the things you said earlier? In particular, some words are widely disseminated as Flags.
Do Kwon: I think I sometimes do things to cater to the community. In retrospect, if you asked me if I was like what some of these words conveyed, I really didn't want to fully admit it.
Zack: What was your experience with the Terra community like? Did it change the person Do Kwon?
Do Kwon: I think the biggest inspiration is that I have a lot of clear things and things I like to do. So I love that moment, I know what the future should look like. And then because of the work you do, it has an impact on the present.
Zack: I mean, what does all this do to you personally? Or because I think you're a billionaire on paper, at least at the time. But tied to this project, it's back to zero.
Do Kwon: So like people tell each other, when you look back, it gets worse and scarier , even beyond redemption. I just want to make it clear that Terra/Luna is everything to me. I put my actions on beliefs, I bet big and I lost it all overnight.
Zack: The next one is about the law. Although neither you nor I are lawyers, how are you going to face all this next?
Do Kwon: You mean, are you right in terms of how to deal with due process? It's not a question of what you are prepared to face, but how you face them.
Zack: Yeah, it's funny because after the crash your legal team all left. We're doing this interview now because you want to be honest and transparent about what happened. I don't know if you're communicating with other lawyers right now, but you probably should.
Do Kwon:While a lawyer would not be happy to work with me, that is the way it is.
Zack: But in terms of those who are involved with the right now, like Daniel Sheen we're talking about. Last night, it was revealed that prosecutors had searched his house and were trying to find some clues. How do you think this affected him?
Do Kwon: Whenever you ask me a question about feeling bad, I'm like a dancer who's just about to go onstage Or, always feels bad, and considering he's been out of the company for a while, I don't think what's going on here has anything to do with him.
Zack: He is still in Korea. Neither former nor current Terra employees are allowed to leave South Korea. Have any of you considered going back?
Do Kwon: It is difficult to make a decision now because we have never been in touch with investigators and they have never been charged with any crimes sued us.
Zack: But I like looking back on things as much as you do. What do you think about this? Like, how do you define fraud?
Do Kwon: If you know something that is not true, then you argue for personal gain or whatever If it's true, then it's fraud.
Zack: However, when it comes to UST and Chai-based Stablecoins At the time, not many people used it. But when the ecology is fully built, you are still talking about Chai as a reason for you to be bullish on the Terra ecosystem.
Do Kwon: I didn't know about the thing they paused on March 18, until recently, as the Wall Street Journal asked Like ours, they tried to suspend Terra's activities and all friends, and I was no longer involved in Chai's management.
Zack: But it's your best friend's company.
Do Kwon: I think if I say something good about something, good news about something, then theoretically Well, I also have a duty to deliver bad news, especially if my good things get noticed.
Zack: But in your opinion, something that ignores risks like this is fraud?
Do Kwon: When we think about trying to build UST, like all the people who choose to work here and in the Terra ecosystem Like all key builders, it seems to me that their main goal is to try to build the best decentralized currency possible. I think everything they said was there to make that happen.
Zack: Most people are overselling the features of the product.
Do Kwon: I don't think that's really the case, we tend to emphasize building on Stablecoins product advantages above. I think it's Terra Stablecoins Everything that excites us is true.
Zack: But this is a very important question. if it is called Stablecoin, its focus is on stability, someone might look at UST and say this product doesn't do anything. Is this assertion unfair?
Do Kwon:I think the correct analogy is that a blood test strip works for a while, and then after a while, it goes off again Completely ineffective. But this time is different, right? Like they think blood test strips never work. In fact, UST it has worked very well throughout its history. The fact that we were working flawlessly was visible and open source and transparent before I stopped working.
Zack: I think, you're a smart guy, you're right Stablecoins probably understands more than anyone in the world. You also know the risk of decoupling. In fact, every Stablecoins Algorithms all fail. I think either Do Kwon is overconfident. In retrospect, no one wants to admit to being overconfident because it makes you look stupid. Or, a person lied about it, which do you think it was?
Do Kwon:Looking back, it seems very unreasonable, but you have to put yourself in the shoes of the founder. If you've had a string of wins, the ecosystem is slowly approaching $100 billion. You get to that size, and then you hardly think you're going to fail.
Zack: You were basically a crypto god back then.
Do Kwon:I will not say that I am a god, I will say that we have gained the trust and confidence of many people inside and outside the industry. It makes us feel very successful. The truth is, we tried to build the best currency in the world, and it just didn't work in the end. You can't get emotional about the market, can you? You can't blame people for being short, and you can't call people idiots for being long.
Do Kwon: If you ask me if it's possible that someone is trying to take advantage of this particular opportunity, I'd say yes. But if these opportunities exist, the onus rests with those who create them in the first place. Who is that? It's me, alone, who takes responsibility for any weakness that may arise for short sellers to start taking profits.
Zack: What about yourself?
Do Kwon:Are you asking if I'm short? I have never been short a cryptocurrency in my life let alone Luna and UST.
Zack: When you think about your daughter, you also talk about So why name your daughter Luna, your dearest child after your greatest invention? What does this mean to her? What does this mean to you as a father?
Do Kwon: Let's just say I'm motivated to make sure her name isn't something she should be ashamed of, but something she can be proud of. Names don't change easily and I think it's an important part of our family history. But I plan to spend a long time here building projects. If my thesis is correct, then I think what I do in the next 20 years will be more meaningful than what happened in the past 6 weeks.
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