Messages written by Do Kwon, the founder of the sunken cryptocurrency ecosystem Terra (LUNA), before the project went bankrupt, with very interesting details, have been revealed.
In his conversation with another Terra founder, Daniel Shin, Kwon mentions that the project pretends to generate transaction fees with fake transactions on CHAI, the payment network.
Kwon says he will collect transaction fees by performing “fake blockchain” transactions that look like real ones, and states that people will not realize they are fake. He rejects Shin's offer to add an inflation mechanism to the Terra network instead of generating fake transaction fees, stating that this would disrupt the stability of the network.
At the end of the conversation, Kwon asks whoever can prove that these transactions are fake and says he will do his best to prevent this from happening.
At that time, there was data showing that very large amounts of transaction volume were generated by real-world sellers using Terra on the CHAI network. With this development, it turned out that these volumes were artificial.
A statement regarding the issue was also made by Chris Amani, the new CEO of Terraform Labs. Amani confirmed that the conversation was real, but argued that this method was necessary to prevent inflationary rewards from being added to the network.
This has nothing to do with Chai and isn't damning.
This was a private conversation, (albeit an inelegant one) about the need to boostrap validators to ensure the security of the chain. In many cosmos chains today, that is done through inflationary rewards.
Terra relied only on… https://t.co/IzBXinwmf9— Chris Amani | Terra (@fleece_cannon) September 29, 2023
*This is not investment advice.
