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 before its introduction to attract more investors.
Mr. B stated that the platform was only designed to deliver a 3.6 percent interest rate and that this was a critical component of maintaining the Terra ecosystem’s stability because it took into account the cash in Anchor’s war chest.
Mr. B, on the other hand, said that a week before the launch, the developers discovered that the plans were revised and that investors could now earn a very high 20% interest by locking up their TerraUSD Classic (USTC) stablecoins in the Anchor Protocol instead.
“I did not know that this would go out with such a high-interest rate. Set to 20% just a week before the release.”“I thought I was going to collapse from the beginning. (I designed it), but it collapsed 100%.”
Said the employee, referred to only as Mr. B
Anchor protocol’s 20% interest was to attract investors
The JTBC also claimed to have obtained internal Terraform Labs design documents, which discussed attracting investors with high-interest rates. Just before the April 2019 launch, the developer says he tried to bring this issue to Terra Luna founder Kwon Do-Hyung (Do Kwon):
The precipitous decline of Terra Classic (LUNC) and the algorithmic stablecoin USTC has prompted the South Korean government to announce intentions to establish a new Digital Asset Committee in June to act as a watchdog over the country’s crypto industry, preparing and enforcing policies.
Do Kwon has been summoned to a parliamentary hearing in South Korea in mid-May on the topic. Despite this, Terra’s co-founder managed to revive the network on May 28 with Terra 2.0, also known as Pheonix-1, a new chain targeted at restoring the Terra (LUNA) and TerraUSD coins (UST).