The Anchor Protocol developer, who designed Terra’s core technology himself, said that it had long expected the collapse of Terra and Luna. The developer said the initial interest rate was designed to be 3.6%, because in order to keep Terra stable, the interest rate needs to be set slightly higher. on bank interest.
But given that there is not enough money inside the company to pay the interest, the deficit will continue to widen if the interest rate is too high, and a slight deterioration in market conditions will cause it to collapse all at once.
A week before Terra went live, Do Kwon raised the interest rate paid to investors to 20%. The developer said he had repeatedly suggested lower rates to Do Kwon, but it was not accepted, and Do Kwon said higher rates could attract investors.
Do Kwon has been asked several times about the matter by reporters, but he has yet to respond.
