Media: Terraform Labs chief behind failed Basis Cash stablecoin project

CEO Terraform Labs Do Kwon was one of the anonymous co-founders of the failed algorithmic stablecoin Basis Cash (BAC). CoinDesk reports this, citing sources.

Launched in the second half of 2020, the coin relied for maintaining a $1 price on arbitrage of the native BAS token. A similar mechanism was used for the Terra ecosystem — UST.

In January 2021, the price of BAC fell below $1, a level it never recovered from. As of writing, the coin was valued at $0.006 (CoinGecko).

At its peak, BAC’s market capitalization stood at $93 million. In May 2022, UST lost its peg to the dollar, at times trading below $0.30. The circulating supply of the stablecoin on the eve of the crash exceeded $18.6 billion.

Former Terraform engineer Hyungsuk Kang [Hyungsuk Kang] told the outlet that Basis Cash was a byproduct of Terra’s founders, including Kwon. 

“Basis Cash had not been tested at that time; we weren’t even sure it would work,” noted the developer.

According to him, Kwon described the project as a pilot.

Kang and another anonymous former employee told CoinDesk that Kwon operated under the alias Rick Sanchez. The second co-founder’s nickname was Morty.

The publication found that Basis Cash developers from Terraform modeled it on an earlier product called Basis. In 2018, the founder of that ‘stablecoin’, Nader Al-Naji, announced the closure of the project amid pressure from the SEC and the return of invested funding totaling $133 million.

On May 11, Kwon unveiled a plan to restore the UST price, as LUNA’s price fell below $1.