Terra Drama Takes A New Turn

Terra CEO is Being Tied to Previously Failed Stablecoin

May 12, 2022

MUSHROOM ALPHA

Hi there! We hope you are staying afloat in this sea of red. Underlying bad news there is always some good news. While the market is down we learn. When the market is up we earn. 

Today's Topics:

  • UST Creator’s CEO Linked to Failed Stablecoin Basis Cash

  • MARA, an African Exchange Backed by Coinbase, Proves Worldwide Adoption

  • TLDR on how to research projects from Onchain Wizard

  • Twitter Thursday

  • Quick Headlines

UST Creator’s CEO Linked to Failed Stablecoin Basis Cash

Overnight UST’s sister coin, LUNA, crashed over 95% in a spiral after an alleged $300M attack. Although the details haven’t been fully sorted out yet, an interesting story is developing surrounding Terraform Lab’s CEO Do Kwon.

Who is Do Kwon?

Do Kwon is a cryptocurrency entrepreneur from South Korea who sought to create a stablecoin completely controlled by code, also known as an algorithmic stablecoin. Do Kwon co-founded TerraLabs in January 2018 to chase his goal of creating the leading stablecoin on the market. His project, now known as UST, received funding from companies such as Binance and attracted partnerships from massive Korean retailers such as Ticketmonster.

Everything sounds great right?

Up until the crash of Terra he was known for his ego and optimism on his Twitter account, but that was often met with criticism and claims of Kwon being a tad bit overzealous at times. Usually, that wouldn’t be an issue for a CEO to be over-the-top about their project - Except now there are claims that he has already failed at a strikingly similar stablecoin project and never shared that information with the cryptocurrency space.

Kwon’s Alleged Role in Basis Cash

Basis Cash (BAC) was launched in 2020 by anonymous creators “Rick” and “Morty” on the Ethereum Blockchain as an algorithmic stablecoin. Like most stablecoins, BAC was meant to be pegged at $1 USD, but currently is trading at $.006 - Yikes!

Just recently after the fall of Terra, early Terraform Labs engineer Hyungsuk Kang, has let the cat out of the bag.

Kang, as well as anonymous employees of TL, came out and stated that BAC was a side project of Kwon’s. Kang stated, “Basis Cash wasn’t tested at the moment, and we weren’t even sure it would work. Kwon wanted to just test it out. He said that this was a pilot project for doing that.” Kang then revealed that Kwon was one of the anonymous creators, “Rick Sanchez”.

Unfortunately, this experiment was tested out using other people’s money and the truth has now come out that Kwon was behind both failures.

Read the full report here

MARA, an African Exchange Backed by Coinbase, Proves Worldwide Adoption

The new cryptocurrency exchange, MARA, will be launching in East Africa in the coming weeks. Backed by Coinbase and other angel investors, MARA will be operating out of Kenya and Nigeria, two countries that lead the world in crypto adoption.

MARA will be partnering with the Central African Republic, a country that legalized Bitcoin as legal tender just last month. Layer-1 blockchains are not easy to create and scale so it is exciting to see one being created out of Africa. 

If MARA performs well, expect to see other similar projects pop up in other developing nations.

TLDR; How to Research Projects from Onchain Wizard

Everyone is looking for the next coin to moon - You are, we are, the whales are. But how do we avoid the FOMO and get in on the ground floor - Check out this article for the full breakdown, but we have your TLDR; covered right here!

The first step to take when looking for a promising project is to fully understand what that project does. Ask these questions to yourself and engage with the project’s community:

  • Is this Project something that has already been done? If not, is this a complex project that can’t be replicated?

  • Who created this project? Was it a guy that was pumping SAFEmoon on his Twitter or is this a team of established developers already in the space?

  • Do some DD on the backend. How many coins are in circulation and what is the market cap? Has this been pumped already or has there been steady movements? Are shills shouting, “Buy this now, we are going to the moon - Lambos next week!” in droves?

  • Before diving in with an investment, check out the social media, discord, and telegram of the project. Read the whitepaper and check out the roadmap, are there any big dates coming up, maybe a milestone?

  • After doing your research on the different aspects of the team and project, cut down the number of projects you will put money in. If you do invest, make sure the project will bring TVL & users.

Twitter Thursday

We are just as skeptical about USDD as everyone else following the collapse of UST.

Check out @ExcelTrading1 on Twitter for a mix of opinions on crypto news, memes, and technical analysis on cryptocurrency.

Quick Headlines

Global Adoption of Crypto Targets Retail Estimated tens of millions of crypto payments by 2025 in US.

Italian Football Club AC Milan Offers Fan Token Starting to see this a lot in the sports world. Gimmick perhaps.

Design Your Own Mining Rig With Argo Blockchain Miners will be able to customize their machines.

Polygon Partners with Meta They are building a NFT platform for Meta which is a huge opportunity. Meta has billions of users.

Funding News:

Check in tomorrow for weekend reads!

Hit Reply to let us know how we are doing! We would love to hear from you.

Was this email forwarded to you? Sign up here.

Disclosure: We are a newsletter for information only. We are not financial advisors nor do we claim to be. Consult your legal, investment or tax advisor. Crypto is risky. Do you own research.