In an Exclusive Interview By JTBC, According to the developers of the Anchor protocol, the original interest rate for the Anchor protocol was 3.6 percent. However, when Do Kwon rejected the proposal, the interest rate for the Anchor protocol was increased to 20 percent a week before it was released.
“We knew it was going to fail the moment we started planning.” Kwon Do-hyung, the company’s CEO, was notified of the problem in advance, although he claimed that he was oblivious of it. According to the documents, the company’s managers were aware that they were close to bankruptcy, but they continued to push it ahead.
Anchor Protocol, lead designer the creator of Terra’s “Anchor Protocol,” has long predicted the system’s inevitable demise.
As part of the planning process, Mr. B came up with a 3.6 percent yearly rate of return for investors.
UST value has Plummeted since Terra’s currency was unable to keep pace with the growing deficit. Luna’s currency had declined by 99 percent in the past month, and this happened only a week after the collapse first began.
a core designer on staff – “It was a complete surprise to me when it was initially made public how much interest there would be in it. One week before to the due date, reduce the percentage to 20%.”
Terra’s equilibrium was maintained by making the interest rate slightly higher than that supplied by banks.
Because the corporation didn’t have enough cash on hand to pay the interest on the loan, this factored into the equation.
Deficits may quickly become unmanageable if the interest rate on internal funds is set too high, which might happen in an instant should market circumstances worsen even a little bit.
“The safety of Terra is jeopardized and there is a danger for collapse” has been cited as a worry by a number of authors.