Do Kwon is the founder of Terra and the face of the ecosystem. He is also extremely active on Twitter and frequently discusses Luna, UST and the merits of algorithmic linking.
Well, I say discuss, but it’s usually far from a discussion. He often takes a very aggressive stance with reports inquiring about the sustainability of the peg, Anchor’s long-term viability, and many other (valid) questions about the UST experiment.
6/ On Depeg risk – I’m tired of arguing with idiots on Twitter about whether UST can remain stable in the bear.
So soon I will propose multi-billion dollar reserves in decentralized assets (BTC and others) to save time. Continue.
— Do Kwon 🌕 (@stablekwon) November 20, 2021
Yesterday his VATstablecoin decoupled to 60 cents. As of this writing, it’s back around 90 cents, but the fear of irreparably damaging trust in the system lingers. And one of the biggest reasons I’m concerned about UST’s ability to recover over the long term is Do Kwon’s stance and silence throughout this debacle.
Just before things got really ugly, he posted below in his trademark casual tone.
I’m honestly pretty tired of “unlocks were a surprise” bs if you can’t bother looking up the fundraising history or understand that I’m giving Terra staff an advantage in Luna I’m sorry, that you are ngmi
— Do Kwon 🌕 (@stablekwon) April 27, 2021
Then nothing. radio silence. His apology when he finally reappeared today, almost 24 hours later? “Didn’t want to be so quiet – needed razor sharp focus to deliver, thanks everyone for the support”. Hmmm.
I’ve argued for a while that Do Kwon doesn’t show the temperament, transparency, or maturity to lead an ecosystem worth billions and billions of dollars (Luna was worth over $40 billion and $18 billion before anything imploded).
Deploy more capital – stable guys
— Do Kwon 🌕 (@stablekwon) May 9, 2022
But whether he’s suitable or not may not be the point. This is advertised as a decentralized stablecoin, which is exactly why it uses the algorithmic peg. So why must we rely on the word of an individual? Why do we have to wait for the Luna Foundation Guard (LFG) to deploy their bitcoin reserves in the most discretionary and opaque way? Is that the actual definition of centralization?
Puzzle me – what is the difference between the LFG’s use of their bitcoin reserves and the Fed’s open market operations with the US dollar?
This has the potential to become one of the biggest asset losses in history if Do Kwon and the LFG fail to convince the market that the bond can be trusted again in the future. After such a public run on the bench it will be an incredible comeback if he makes it and I will definitely take my hat off to him.
I’m just afraid the silence from him during yesterday’s meltdown says measures of the extent of the damage and how deep this crisis really is. If you’re talking about a run on the bench, once the confidence is gone, it’s game over. So whether or not that trust can be restored is all worth it here.
With that in mind, Do Kwon’s next tweet could be the most important in Terra history.
Source: Crypto News Deutsch