Do Kwon Was Allegedly A Co-Founder Of Failed Stablecoin Basis Cash
According to a report, Terraform Labs CEO Do Kwon was involved in a stablecoin project called Basis Cash under the pseudonym “Rick Sanchez.”
According to CoinDesk report, Terraform Labs Founder and CEO Do Kwon was behind the pseudonym “Rick Sanchez,” one of the anonymous co-founders of the failed stablecoin project, Basis Cash. The crypto news outlet claimed to have communicated with two former developers with knowledge of the project who said be able to confirm Kwon’s involvement.
CoinDesk also said it had seen chat logs revealing “Rick’s” identity to be Kwon. If the allegations turn out to be true, it would mean that UST is not the first algorithmic stablecoin project in which Kwon has been involved.
Basis Cash (BAC) was an early project in the world of algorithmic stablecoins. It was launched on Ethereum in late 2020. Similar to UST, it was intended to be pegged to the value of the dollar through code rather than 1:1 backing by fiat or other collateral.
However, it didn’t quite work as intended. In December 2020, one BAC was worth $155. It rapidly sunk to levels close to $1, but the price parity never locked, and it’s been in decline ever since. At the time of writing, BAC trades for $0.006.
Hyungsuk Kang, a former engineer at Terraform Labs, claims to have worked alongside Kwon on the project, and said that Basis Cash was in fact a side project for some of the early creators of Terra, according to CoinDesk report. According to Kang, Kwon viewed Basis Cash as a “pilot project” for testing out the theory behind algorithmic stablecoins. Coindesk also claims to have confirmed Kwon’s involvement in Basis Cash with another developer who worked on the project but wanted to remain anonymous.
Basis Cash was inspired by Basis (formerly known as Basecoin), which introduced the idea of an algorithmic stablecoin back in 2018. However, the project was shut down over regulatory concerns. Under the pseudonym “Rick” and alongside his as-of-yet-unidentified co-founder “Morty,” Kwon revived the project in late 2020.
Interestingly, the revelation has come to light right at a moment when Kwon’s flagship project, Terra, is facing serious troubles, which puts the timing of it all under a question mark.
Terra’s UST stablecoin depegged over the weekend and is currently trading at $0.82. Terra’s other token, LUNA, which traded for around $85 as recently as last week, is changing hands at $1.11.
The events surrounding Terra this week are rarely been seen in the crypto market, and the effects have been widespread. The total crypto market shrunk by 7.3% over the last 24 hours as investors rush to protect their assets.
