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    Anchor Dev Revealed Truth Behind Terra Collapse

    Cryptory.net - As revealed by an Anchor dev, Terra arbitrarily changed the UST interest rate from 3.6% to 20% right before launch to attract investors.

    Recently, a member of the Anchor development team revealed a “shocking” truth in the development of UST. Accordingly, it was the last-minute change in the UST interest rate to attract Terra investors that was one of the causes of the Terra crash at the beginning of last May.

    In an interview with Korean media outlet JTBC, this person said that Anchor Protocol was originally designed to offer a 3.6% interest rate to users. However, just a week before release, Terra raised the interest rate up to 20% to attract more investors. “I did not know that this would go out with such a high-interest rate. Set to 20% just a week before the release,” the dev said.

    Keeping the interest rate at 3.6% is an important factor for Terra ecosystem to stay stable. This employee seems to have predicted a bad future, so (s)he met and suggested to CEO Kwon Do-Hyung that the interest rate should be lowered but her/his suggestion was not approved. JTBC also claims that it has obtained internal Terraform Labs documents, which wrote about attracting investors with high interest rates.

    The sudden collapse of Terra Classic (LUNC) and stablecoin USTC caused Do Kwon to be summoned to attend a parliamentary hearing on the matter in South Korea in mid-May. Court documents also indicate that Do Kwon dissolved Terraform Labs just several days before the crash. Terraform Labs is also facing charges of price manipulation and non-compliance with token listing procedures. Despite all of that, the founder of Terra still launch a new chain called Terra 2.0, or Pheonix-1, on May 28 to revive Terra (LUNA) and TerraUSD (UST).

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