ANCHOR DEV CLAIMS HE WARNED DO KWON OVER UNSUSTAINABLE 20% INTEREST RATE

Last updated: June 20, 2025, 01:23 | Written by: Erik Voorhees

The collapse of Terra Luna and its algorithmic stablecoin UST sent shockwaves through the cryptocurrency market, wiping out billions of dollars in value and leaving countless investors reeling.As the dust settles, investigations are underway, and blame is being assigned. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Mr. B alleges that the platform was designed to only offer an interest rate of 3.6%, but that. Orbit Chain Offers Multi-Million Dollar Bounty to the Public After Suffering $81,000,000 Hack Last.A key figure in the unfolding drama is Do Kwon, the founder of Terra Luna, who is now facing serious allegations of ignoring warnings about the unsustainability of Anchor Protocol’s promised 20% interest rate. [ Novem Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate.A core developer, identified as Mr.B, has come forward claiming that he directly cautioned Kwon about the inherent risks of offering such a high yield, especially given the protocol's underlying mechanics. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate. By .This revelation adds fuel to the fire, suggesting that the collapse was not simply a black swan event but a consequence of deliberate choices made in the face of expert advice.The story highlights the importance of sustainable financial models in the volatile world of decentralized finance (DeFi) and raises crucial questions about accountability and regulatory oversight within the crypto space. In an interview with a Korean media source JTBC, a core Anchor protocol developer, claimed that it was originally supposed to offer a 3.6 percent interest rate but that it was increased to 20% just a week beforeThis article dives into the specifics of the claim, exploring the implications for Do Kwon, the future of DeFi, and what investors can learn from this cautionary tale.

The Anchor Protocol and the Allure of 20% Yield

The Anchor Protocol was a key component of the Terra Luna ecosystem, designed to attract users and drive demand for UST.It promised a remarkably high yield of approximately 20% on UST deposits, a figure that dwarfed traditional savings rates and even many other DeFi platforms. Anchor protocol was originally designed to offer an interest rate of 3.6%, but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an interview with Korean media outlet JTBC. I did not know that this would go out with such a high-interest rate.This high yield was a major draw for investors, contributing significantly to the rapid growth of UST and the overall Terra Luna ecosystem. Menu. Home; Bitcoin Chart; Cryptocurrency News; Cryptocurrency Software; Privacy PolicyHowever, the sustainability of this high yield was a constant source of debate and concern within the crypto community.

Critics argued that the 20% APY was simply too good to be true, questioning how the protocol could consistently generate such returns. Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an interview with Korean media outlet JTBC. I did not know that this would go out with such a high-interest rate.They pointed out that the yield was primarily subsidized through external reserves and LUNA token emissions, rather than being organically generated by lending activities or other sustainable revenue streams.As a result, the long-term viability of the protocol was heavily dependent on continued inflows of new capital, making it vulnerable to market downturns and shifts in investor sentiment.

Developer's Warning: A 3.6% Rate Recommended

According to an interview with Korean media outlet JTBC, a core developer, referred to as Mr. An Anchor Protocol developer alleges that Terra Luna founder Do Kwon was warned about Anchor's unsustainable 20% yields but ignored advice.B, alleges that the initial design of the Anchor Protocol envisioned a much more modest interest rate of 3.6%.This rate was considered more sustainable and aligned with the protocol's underlying mechanics and potential revenue generation. Anchor protocol was initially designed to supply an rate of interest of three.6% however this was dialed as much as 20% only a week earlier than launch to draw extra buyers, a core developer alleged in an interview with Korean media outlet JTBC. I did not know that this would go out with such aHowever, just a week before the protocol's launch, the decision was made to drastically increase the interest rate to 20% in order to attract more investors and boost adoption of UST.The developer claims he voiced his concerns directly to Do Kwon regarding the potential risks of this high yield, but his warnings were reportedly ignored.

The Rationale Behind the Increased Rate

The decision to increase the interest rate to 20% was a calculated gamble aimed at rapidly scaling the Terra Luna ecosystem.By offering such an attractive yield, the protocol aimed to incentivize users to deposit their UST, thereby increasing its demand and stabilizing its peg to the US dollar. Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an Anchor dev claims he warned Do Kwon over unsustainable 20% interest rateThis strategy initially proved successful, as the Anchor Protocol quickly became one of the largest DeFi platforms, attracting billions of dollars in deposits. The developer said he attempted to take this issue up with Terra Luna founder Kwon Do-Hyung (Do Kwon) just ahead of the launch in April 2025. Just before the release, I suggested to CEO Kwon Do-Hyung that the interest rate should be lowered, but it was not accepted.However, it also created a dependency on continued inflows of new capital to maintain the high yield, making the protocol increasingly vulnerable to a liquidity crisis.

The core developer's claim sheds light on the internal debates and concerns surrounding the decision to prioritize rapid growth over long-term sustainability.It suggests that the risks associated with the high yield were well-understood, but ultimately disregarded in pursuit of short-term gains.

Do Kwon's Alleged Disregard for Concerns

Mr. Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in anB's accusation that Do Kwon dismissed his warnings raises serious questions about Kwon's leadership and decision-making. Posted by u/[Deleted Account] - 229 votes and 95 commentsIf true, it suggests that Kwon was aware of the potential unsustainability of the 20% interest rate but chose to proceed anyway, potentially prioritizing growth and user acquisition over the long-term health and stability of the Terra Luna ecosystem. Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an interview with Korean media outlet JTBC.This alleged disregard for expert advice could have significant legal and reputational consequences for Kwon, particularly in the context of ongoing investigations and potential lawsuits.

It is important to note that these are allegations, and Do Kwon has not yet publicly addressed them specifically. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Written by Richard Ingram Posted in Cryptocurrency Comments 0 Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an interview with KoreanHowever, the claims align with broader criticisms of Kwon's approach to managing the Terra Luna ecosystem, which some have characterized as overly aggressive and focused on rapid expansion at the expense of risk management.

The Inevitable Collapse of Terra Luna and UST

The concerns surrounding the Anchor Protocol's high yield ultimately proved to be well-founded. Core developers allegedly warned Do Kwon about setting Anchor s interest rates at 20% in the week before launch, but we all saw the outcome of that.In May 2022, the Terra Luna ecosystem experienced a catastrophic collapse, triggered by a de-pegging event that saw UST lose its value against the US dollar.As UST's value plummeted, investors rushed to withdraw their deposits from the Anchor Protocol, exacerbating the liquidity crisis and leading to a death spiral that wiped out both UST and LUNA. Mr B alleges that the platform was designed to only offer an interest rate of 3 6 but that changed at the last minute Anchor protocol was originally designed to offerThe collapse resulted in billions of dollars in losses for investors and triggered a broader downturn in the cryptocurrency market.

The Death Spiral Explained

The de-pegging of UST triggered a series of events that led to the collapse of the entire Terra Luna ecosystem.As UST lost its peg, investors began to panic and withdraw their funds from the Anchor Protocol.This increased selling pressure on UST further drove down its price, creating a feedback loop that led to a rapid devaluation. Mr. B alleges that the platform was designed only to offer an interest rate of 3.6%, but that changed at the last minute. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate News RisingIn an attempt to defend the peg, the Luna Foundation Guard (LFG), which was responsible for managing Terra's reserves, began selling its Bitcoin holdings and buying UST. Crypto News ~ Anchor dev claims he warned Do Kwon over unsustainable 20% interest rateHowever, this proved insufficient to stem the tide, and UST ultimately collapsed to near zero.The value of LUNA also plummeted as the mint-and-burn mechanism designed to maintain UST's peg flooded the market with new LUNA tokens, leading to hyperinflation.

Consequences and Legal Repercussions

The collapse of Terra Luna and UST has had far-reaching consequences, both for the individuals and institutions that invested in the ecosystem and for the broader cryptocurrency market. (Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate) has been published on Coin-News -Investors have suffered significant financial losses, and the incident has raised serious questions about the risks associated with algorithmic stablecoins and the lack of regulatory oversight in the DeFi space.Do Kwon and Terraform Labs are now facing multiple lawsuits and investigations from regulatory agencies around the world.These legal challenges could result in significant financial penalties and even criminal charges.

The Legal Landscape

The legal landscape surrounding the collapse of Terra Luna is complex and evolving.Several lawsuits have been filed against Do Kwon and Terraform Labs, alleging securities fraud, misrepresentation, and other violations of law. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate. June 9Regulatory agencies, such as the Securities and Exchange Commission (SEC) in the United States, are also investigating the incident to determine whether any securities laws were violated.The outcome of these legal proceedings could have a significant impact on the future of DeFi and the regulatory landscape for cryptocurrencies.

Lessons Learned: Sustainability in DeFi

The Terra Luna debacle serves as a stark reminder of the importance of sustainability in the DeFi space.The allure of high yields can be tempting, but investors must carefully assess the underlying mechanisms and risks associated with any DeFi protocol.A high APY is not always a sign of a healthy or sustainable project.

Key Takeaways for Investors:

Do your own research (DYOR): Before investing in any DeFi protocol, take the time to understand how it works, where its yields come from, and what risks are involved.
Be wary of unsustainable yields: If a yield seems too good to be true, it probably is.Question the long-term viability of protocols offering exceptionally high returns.
Diversify your portfolio: Don't put all your eggs in one basket.Diversify your investments across multiple protocols and asset classes to mitigate risk.
Understand the risks of algorithmic stablecoins: Algorithmic stablecoins can be particularly vulnerable to de-pegging events and liquidity crises.Be aware of the potential downsides before investing.
Stay informed: Keep up-to-date with the latest news and developments in the DeFi space.Knowledge is your best defense against scams and unsustainable projects.

The Future of DeFi: Regulation and Accountability

The Terra Luna collapse has also highlighted the need for greater regulation and accountability in the DeFi space.As the industry continues to grow and evolve, it is essential to establish clear rules and guidelines to protect investors and promote responsible innovation. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Anchor protocol was originally designed to offer an interest rate of 3.6% but this was dialed up to 20% just a week before release to attract more investors, a core developerThis could include regulations related to stablecoin reserves, disclosure requirements, and auditing standards.

Potential Regulatory Changes

The precise form that future DeFi regulations will take is still uncertain, but several potential changes are being discussed.These include:

Stablecoin regulation: Regulators may impose stricter requirements on stablecoin issuers, including reserve requirements, auditing standards, and redemption mechanisms.
Centralized exchanges oversight: Increased scrutiny of centralized exchanges, including stricter listing requirements and enhanced monitoring of trading activity.
DeFi protocol regulation: Regulations targeting DeFi protocols directly, including rules related to smart contract security, risk management, and user protection.
Consumer protection: Emphasis on protecting retail investors from scams and fraud in the DeFi space.

The Need for Transparency and Due Diligence

Ultimately, the Terra Luna saga underscores the critical importance of transparency and due diligence in the cryptocurrency market. Mr. B alleges that the platform was designed to only offer an interest rate of 3.6%, but that changed at the last minute. The post Anchor dev claims he warned Do Kwon over unsustainable 20%Both developers and investors need to prioritize responsible innovation and risk management. [ad_1] Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate Anchor protocol was originally designed to offer an interest rate of 3 Search for SidebarThis requires open communication, rigorous auditing, and a commitment to building sustainable financial models.Do Kwon's alleged disregard for concerns about the Anchor protocol serves as a cautionary tale, highlighting the potential consequences of prioritizing short-term gains over long-term stability.

Moving forward, the DeFi community must learn from the mistakes of the past and work together to create a more resilient and transparent ecosystem.This includes promoting education and awareness, fostering collaboration between developers and regulators, and holding individuals and organizations accountable for their actions.

Conclusion: A Wake-Up Call for the Crypto World

The allegation that an Anchor Protocol developer warned Do Kwon about the unsustainable 20% interest rate before the Terra Luna collapse is a critical piece of the puzzle in understanding what went wrong. Anchor dev claims he warned Do Kwon over unsustainable 20% interest rateIt suggests that the risks were known and potentially ignored, raising serious questions about Kwon's leadership and responsibility.This event serves as a stark reminder of the importance of sustainable financial models in DeFi and the need for thorough due diligence by investors.The future of DeFi depends on learning from these mistakes and building a more transparent, regulated, and responsible ecosystem.As the dust settles, the focus should be on promoting investor education, fostering collaboration between developers and regulators, and ensuring accountability to prevent similar catastrophes in the future.The Terra Luna collapse and the claims surrounding it should act as a powerful wake-up call for the entire crypto world.