The collapse of Terra seemed inevitable from the design stage, according to anonymous developers of the Anchor Protocol who spoke to JTBC on condition of anonymity.<\/p>\n
They say that the calculations during protocol development assumed a fixed yield of 3.6%, but a week before launch Do Kwon, head of Terraform Labs, scrapped that idea and raised the ceiling to 20%.<\/p>\n
The JTBC sources said they repeatedly warned management about the risks and possible consequences of such a move, but Kwon did not heed their arguments. They also stressed that Terraform Labs’ head alone made all key decisions regarding the project\u2019s development.<\/p>\n
\n\u201cDo Kwon could make people believe even the most absurd things. He did whatever he wanted,\u201d said a channel source.<\/p>\n<\/blockquote>\n
Internal Terraform Labs documents dated March\u2013April 2022 show Kwon allegedly instructing the maintenance of the 20% yield, even if Anchor’s reserves were insufficient to pay users.<\/p>\n
In July 2021, economist Frances Coppola warned about the risks associated with the high yield, noting that a sudden liquidity outflow from the product could trigger its collapse. In response to her remarks, Kwon replied that he “does not argue with the poor on Twitter”.<\/p>\n
Earlier FatMan, citing his own sources at Terraform Labs, said that in 2020 the company inflated figures on the amount of funds locked in the ecosystem to attract venture capital.<\/p>\n
\nA verified TFL insider has confirmed that in 2020, TFL would internally fake Terra blockchain volume to match real Chai volume. This was fraudulently used as a major selling point to raise millions from investors and VCs using the slogan ‘Korea runs on Terra.’ pic.twitter.com\/LX1FxS8tzs<\/a><\/p>\n
\u2014 FatMan (@FatManTerra) June 7, 2022<\/a><\/p><\/blockquote>\n