Interview with Terra Founder: I bet everything, but this time I lost
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Interview with Terra Founder: I bet everything, but this time I lost
Once gambled everything, never expected to lose it all.
Navigating Web3 tides with focused insightsUST has lost its once-stable dollar-pegged stablecoin—the man who propelled its rise: Do Kwon.
Three months later, as the UST narrative gradually unravels, Do Kwon has reappeared in public. Now he's attempting to rebuild UST, but almost from scratch. To most people, weighed down by deep skepticism over his past, his future hardly seems worth paying attention to. So Zack from Coinage traveled to Singapore and conducted a two-day interview with Do Kwon at his office and home, seeking to understand whether Terra’s collapse was truly just a failure—or perhaps a scam.
Do Kwon opened up on camera for the first time, admitting he once believed himself highly successful. On the night UST collapsed, he attempted to raise $2 billion—only for news to leak, triggering a swift short squeeze. “I wanted to bet big, but I lost.”
TechFlow compiled and translated based on video content:
Zack: How do you respond to the claim that “UST was a scam”?
Do Kwon: I don’t think the UST incident involves moral wrongdoing, especially in an industry that requires substantial technical understanding. But providing a satisfying answer when everyone is suffering and angry is extremely difficult.
Zack: UST collapsed within just 72 hours. Were you surprised by how fast it happened?
Do Kwon: I never thought such a scenario could happen. Since then, I’ve been working hard to rebuild the ecosystem and community, just like what I’ve done over the past five years. I still haven’t found the right words to describe this feeling—many people in the community lost their money, their lives, their savings… Many projects built on Terra likely had similar experiences, possibly even worse.
Zack: As the creator of all this, that must be cruel.
Do Kwon: Obviously, in hindsight, many beliefs I held and assumptions I made were wrong.
Zack: I think trust is central here. Ironically, in many of these so-called “trustless” systems like UST, a key question arises: do you trust the person who created this trustless system? What can you say to make people believe you?
Do Kwon: If all of this was for personal gain, it would be the most foolish way imaginable. Why spend five years risking your entire reputation, name your daughter Luna, and become the most hated person on the internet in a short span?
The only thing I can—and should—do best is to be candid about everything that happened and admit my mistakes.
Zack: When Anchor Protocol launched, its APR wasn’t 8%—it was 20%. It’s said that some employees initially thought a 20% APY was outrageous, far above existing market levels.
Do Kwon: Actually, internally, our consensus on interest rates was thousands of percent APR.
Zack: During its rapid growth, Anchor eventually attracted nearly $17 billion. Did that meet your expectations?
Do Kwon: I felt that every day, UST grew stronger than the day before.
Zack: There was another operational strategy behind UST, which seemed different from the original promise of UST and LUNA—an algorithmic stablecoin that functioned perfectly without reserves.
Starting from Bitcoin, adding various types of collateral could give UST a real chance to become a decentralized stablecoin for all cryptocurrencies.
But I’m curious—where did this plan come from? And what was your motivation at the time?
Do Kwon: We started using Bitcoin because we believed it was the most resilient and unbiased digital currency on the planet. If we optimized things—like tying it to economic stability—we might have enough reserves.
I think on another level, I bet too much on Bitcoin. Honestly, I didn’t expect it to drop so much. I knew Bitcoin had already fallen 80% over time, but back then, I was thinking about the unprecedented amount of economic output being generated in crypto and the sheer number of people entering and building in this space. At the time, I wanted to build something truly decentralized and highly resilient—but I was wrong.
Zack: Let’s walk through the actual timeline when things unfolded. When UST first slightly depegged, your Twitter account appeared very calm. Then, as things spiraled, you began personally engaging with the Terra team. What happened that day?
Do Kwon: I was in Singapore. I woke up in the morning and noticed the Curve pool was unbalanced due to a very large trade. The initial transaction was around $84 million, so I accumulated several hundred million dollars in total to counteract it.
But as seen on Twitter, market sentiment worsened, more people started trading on Curve, and selling pressure intensified. So we began raising $2 billion overnight to resist the shock, but the news leaked. We started seeing a massive buildup of LUNA short positions, and the value of the tokens we planned to sell was already doomed to decline.
Zack: When the deal fell through, what was the situation like in the war room?
Do Kwon: Looking back, I didn’t feel UST couldn’t re-peg, because I’d experienced multiple crises like this before—and it always recovered.
Zack: At what point did the discussion in the war room shift to “we’ve tried everything, but nothing worked”?
Do Kwon: When I entered a mild state of shock—I don’t think I even realized it myself, because like most people there, we hadn’t slept for days.
Zack: How much did you sleep that week?
Do Kwon: Several consecutive all-nighters. I don’t really remember. I just didn’t notice the passage of time. Even now, if you ask me what happened during the day or at night, I can’t tell you—because I barely got out of bed. Everything was dark.
Zack: In the Terra community, many talked about suicide and losing life savings. A friend in my co-founder’s family committed suicide. There are many such stories. What would you say to those affected?
Do Kwon: After the chain reaction stopped, I spent several days calling many people I had personally interacted with in the Terra community. It was all incredibly difficult.
Zack: Have you ever thought about retracting some of the things you said earlier? Especially statements that became widely circulated as red flags?
Do Kwon: I think sometimes I did things to cater to the community. Looking back, if you ask whether I truly meant everything conveyed in those statements—I wouldn’t fully admit it.
Zack: What was the experience of being with the Terra community like? Did it change who Do Kwon is?
Do Kwon: I think the biggest insight was realizing I had clarity on many things and on what I love doing. I loved that moment, knowing what the future should look like. And because of the work you do, it impacts the present.
Zack: I mean, what personal losses have you suffered from this? Or because I assume you were paper-rich—a billionaire at least at that time. But tied to this project, it’s now zero.
Do Kwon: As people often say, looking back, the situation becomes even worse, scarier—even irredeemable.
Let me make one thing clear: Terra/Luna was my everything. I put my actions behind my beliefs. I made a huge bet, and overnight, I lost it all.
Zack: Next is a legal question. Neither of us are lawyers, but how are you preparing to face all this?
Do Kwon: You mean regarding due process, right? It’s not about what you’re preparing to face, but how you face it.
Zack: Yes, this is interesting—after the crash, your legal team left. We’re doing this interview because you want to speak honestly and transparently about what happened. I don’t know if you’re currently communicating with other lawyers, but maybe you should.
Do Kwon: It’s true that lawyers aren’t eager to work with me.
Zack: But among those currently involved in this matter—say, Daniel Shin, whom we’re discussing—last night, news emerged that prosecutors searched his home, trying to find clues. What impact do you think this has on him?
Do Kwon: Whenever you ask me something uncomfortable, I feel like a dancer about to go on stage—always awful. Considering he left the company some time ago, I don’t think what’s happening here has anything to do with him.
Zack: He’s still in South Korea. Former and current Terra employees can’t leave Korea. Has anyone considered going back?
Do Kwon: It’s hard to decide now, because we’ve never been contacted by investigators, nor charged with any crime.
Zack: But like me, you enjoy reflecting on things. What’s your take—for instance, how do you define fraud?
Do Kwon: If you know something isn’t true, yet argue it’s true for personal gain or any purpose, that’s fraud.
Zack: However, earlier when talking about UST and the Chai-based stablecoin, few people used it. But after the ecosystem was fully built, you still talked about Chai as a reason to be bullish on the Terra ecosystem.
Do Kwon: I didn’t know they paused operations on March 18 until recently—just like when The Wall Street Journal asked us, they tried to pause Terra-related activities and cut ties with all friends, and I was no longer involved in Chai’s management.
Zack: But it was your best friend’s company.
Do Kwon: I think, if I spoke positively about something, in theory, I also have a responsibility to share bad news—especially if my positive remarks drew attention.
Zack: But ignoring risks like this—is that fraud in your view?
Do Kwon: When we considered building UST, just like everyone who chose to work here and all key builders in the Terra ecosystem, their main goal, as I saw it, was to create the best decentralized currency. I believe everything they said was aimed at achieving that goal.
Zack: Most people tend to oversell product features.
Do Kwon: I don’t think that’s accurate. We tended to emphasize the strengths of products built on top of the stablecoin. I believe everything exciting about Terra’s stablecoin was genuine.
Zack: But this is a crucial point. If it’s called a stablecoin, its focus is stability. Someone might look at UST and say this product didn’t deliver. Is that unfair?
Do Kwon: The right analogy is a blood test strip that works well for a while, then suddenly fails completely.
But this time is different, right? People act as if the blood test strip never worked. In fact, UST functioned well throughout its history. Before I stopped working on it, its perfect operation was visible, open-source, and transparent.
Zack: I think you’re smart—you probably understand stablecoins better than anyone else in the world. You also knew the depeg risk. In fact, every algorithmic stablecoin in history has failed. So either Do Kwon was overly confident. In hindsight, no one wants to admit being overconfident because it makes you look foolish. Or someone lied about it. Which one do you think it is?
Do Kwon: Looking back, it does seem highly unreasonable. But you have to put yourself in a founder’s shoes. If you’ve had a series of wins, and the ecosystem is slowly approaching $100 billion, once you reach that scale, you almost can’t imagine failing.
Zack: Back then, you were basically a god of crypto.
Do Kwon: I wouldn’t call myself a god. I’d say we earned a lot of trust and confidence from people inside and outside the industry. That made us feel incredibly successful. The truth is, we tried to build the world’s best money—but in the end, it just didn’t work.
You can’t let emotions guide your view of the market, right? You can’t blame people for shorting, nor call others idiots for going long.
Zack: Are you trying to suggest there was a conspiracy, that someone attacked the community?
Do Kwon: If you ask whether someone might have exploited this specific opportunity, I’d say yes. But if such opportunities exist, the primary responsibility lies with those who created the vulnerabilities. Who was that? Me. I alone am responsible for any weaknesses that allowed short-sellers to profit.
Zack: What about yourself?
Do Kwon: Are you asking if I shorted it? I’ve never shorted any cryptocurrency in my life—let alone Luna or UST.
Zack: When you think about your daughter, you’ve mentioned naming her Luna—your beloved child named after your greatest invention. What does that mean for her? And as a father, what does it mean for you?
Do Kwon: Let’s just say I’m motivated to ensure her name isn’t something she should be ashamed of, but something she can be proud of. Names don’t change easily. I see it as an important part of our family history. But I plan to spend a long time here building projects. If my argument holds, I believe what I’ll accomplish in the next 20 years will outweigh what happened in the past six weeks.
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