After a lapse of March, when the narrative of UST was 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 see 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 the UST collapse, he tried to raise 2 billion US dollars. Unexpectedly, the news leaked and the short sellers quickly squeezed, "I wanted to bet big, but I lost"...
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Zack: How to refute the view that "UST is a scam"?
Do Kwon：I don't think the UST incident involves ethical issues, 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. Were you 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 UST-like trustless systems 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 doing it all for personal gain, it's probably the dumbest way to go. 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 be honest about what happened and admit I was wrong.
Zack: When the Anchor protocol appeared, 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：In fact, the internal consensus on interest rates is APR in the thousands of percent.
Zack: Did Anchor live up to your expectations as it grew rapidly and ended up capturing 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 algorithmic stablecoin that works perfectly without requiring a reserve.
If starting with Bitcoin, by adding multiple types of collateral, UST has a real chance of becoming a decentralized stablecoin for all cryptocurrencies.
But I'm curious where this kind of planning 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 and unbiased digital currency on this Odaily. 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 when UST was slightly decoupled. 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 made a really 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 you can see 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 trading in the middle of the night Raising $2 billion to counteract this onslaught, but word got out and we started to see a lot of LUNA empty orders piling up, so the value of the tokens we were planning to sell has gone downhill.
Zack: What was the situation in the war room when the deal didn't happen?
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 that I have 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 mild state of shock, I don't think I even noticed at the time because, like most people in those places, we hadn't slept at all for the past few days.
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 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 calling many of the people I spoke to in person in the Terra community, and everything was tough.
Zack: Have you ever thought about taking back some of the things you said? In particular, some words are widely disseminated as Flags.
Do Kwon：I guess 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? Changed Do Kwon as a person?
Do Kwon：I think the biggest inspiration is that I have a lot of clarity and things that I love 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 cost 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 it's like people tell each other, when you look back, it's much worse and more dire, 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, 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 wouldn't be happy working with me, that's 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 how I feel bad I feel like a dancer who is just about to hit the stage, I always feel bad and considering he's been out of the business for a while I don't think what's going on here has anything to do with him any relationship.
Zack: He's 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's hard to make a decision now because we've never been in touch with investigators, and they've never charged us with any crimes.
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 isn't true, and you argue that it's true for your own personal gain or whatever purpose it might be, then that's fraud.
Zack: However, when it came to UST and Chai-based stablecoins before, 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 don't know about the thing they suspended on March 18th, until recently, as the WSJ asked us, they tried to suspend Terra's activities and all friends, and I am no longer involved in the management of Chai.
Zack: But it's your best friend's company.
Do Kwon：I think that if I say good things about something, good news about something, then theoretically I have a duty to say bad things, especially if I say good things that get attention.
Zack: But something that ignores risk like this, in your opinion, is it fraudulent?
Do Kwon：When we think about trying to build UST, like all the people who choose to work here and all the key builders in the Terra ecosystem, 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 oversell the product's features.
Do Kwon：I don't think that's the case, we tend to emphasize the benefits of products built on top of stablecoins. I think it's true that everything we're excited about about Terra's stablecoins is true.
Zack: But this is a very important question. If it's called a stablecoin, its focus is on stability, someone might look at UST and say the 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 completely fails again.
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, and you probably understand more about stablecoins than anyone in the world. You also know the risk of decoupling. Virtually every stablecoin algorithm in history has failed. 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：In retrospect, this 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: Back then you were basically a crypto god.
Do Kwon：I wouldn't say I'm a god, I'd say we have the trust and confidence of a lot of people in and out of 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 with the market, can you? You can't blame people for being short, and you can't call people idiots for being long.
Zack: Are you trying to prove that there is a conspiracy here, that someone is attacking the community?
Do Kwon：If you're asking me if it's possible that someone is trying to take advantage of this particular opportunity, I'd say the answer is 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 talked about why you named your daughter Luna, your dearest child named 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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