- Do Kwon was supposedly a co-founder of a crashed stablecoin protocol – Basis cash
- The token leveraged an algorithmic model similar to UST
- Sources claim Basis Cash was built by Kwon alongside current and former Terraform Labs employees
- The news comes to light amid UST’s and LUNA’s current price crisis
Things have reportedly taken a sharp turn following TerraUSD’s (UST) rise to the top three stablecoins in crypto. The coin has since depegged from the US Dollar and LUNA is trading below $3 dollars as of press time.
Furthermore, new information has surfaced linking Terraform Labs CEO Do Kwon to a previous stablecoin project that failed to live up to expectations.
According to a CoinDesk report, Do Kwon and a few Terraform employees are allegedly the co-founders of Basis Cash, a stablecoin with an algorithmic mechanism similar to Terra’s UST token.
CoinDesk backs up the claims by citing conversations and backroom chatlogs between Basis Cash founders, one of whom was Do Kwon under the pseudonymous monicker “Rick Sanchez”, a character from the popular adult tv cartoon show Rick and Morty.
Basis Cash launched in 2020 and was supposedly designed using ideas from another stablecoin protocol founded by Nader Al-Naji. The coin dubbed Basis/Basecoin ultimately crumbled after Al-Naji cited regulatory doubts regarding securities policies.
Notably, the project $133 million from investors before shutting down.
Do Kwon, under the “Rick Sanchez” alias, revived the project sometime in August 2020 along with a band of Terraform engineers and employees, per the report. Kwon was supposedly intrigued by the thesis and dubbed the foray as a pilot project.
Basis Cash eventually attracted investors, boasting an estimated $175 million in total value locked (TVL) as of December 2020. However, similar to UST’s current crisis, the protocol crashed shortly after and is currently far below its promised $1 peg.
Could Do Kwon’s UST Share The Same Fate As Basis Cash?
The details of the discovery carry weight considering the current situation with UST and LUNA prices. Also, the timing of Basis Cash’s launch is pertinent as Terra reportedly launched UST in September 2020, a month after Basis Cash was unveiled by Rick Sanchez (allegedly Do Kwon).
As of the time of writing this report, UST is below the $1 mark and is down 24% per data from CoinMarketCap.