Author: Bran | Running Finance
Original article: " Do Kwon's Life: Fame, Fortune and Sin "
On Do Kwon's Twitter profile, his avatar is an image of an anime cartoon character similar to Tony Stark's Iron Man, wearing a Thanos glove inlaid with six energy gems, and a mask very much like Robocop's. Behind him is a conspicuous LUNA icon rising in yellow flames in the black night sky.
Do Kwon seems to want to tell people through this avatar that he is a superhero with powerful personal abilities, representing justice, trying to shine his light on the vast land like the moon in the dark world and lead the world towards dawn.
However, the moon reached its zenith and then disappeared. Luna no longer represents the moon goddess, but has become a synonym for Lunatics. Do Kwon, who was once admired by everyone and had the opportunity to become a superhero, is now a fugitive.
At this time, Do Kwon not only has to face a US$57 million class action lawsuit from Singapore, but also has to deal with indefinite accountability and pursuit by the prosecution authorities of his motherland.
Although he has maintained a high profile as always, claiming that he is still committed to building encryption projects, and announcing to the outside world that he will hold a meeting to respond to various issues, and that global police and government officials will be welcome to participate, his "final battle", no matter what the truth is, for the Terra project itself, which has been in a mess, and the investors who have suffered heavy losses, these are real and can no longer be recovered.
If God gives Do Kwon another chance, he might curb his arrogance and edge, no longer ignore the fuel energy of the mecha in order to fly higher and farther, and no longer call those who question and criticize him "poor people" and "cockroaches."
Starting out: Young Talents
Do Kwon has not revealed much about his early life and education. However, from his education history and some details of his life, it can be seen that Do Kwon is likely to have a wealthy family and is a gifted student. Not only does he have excellent grades and a high talent for languages, but he is also very good at e-sports in addition to his studies.
Do Kwon graduated from Daewon Foreign Language High School, a private preparatory school in Seoul, South Korea. As the capital and largest city of South Korea, Seoul was ranked as the world's fourth largest metropolitan economy in 2014. Whether Do Kwon lives in Seoul or not, he is able to get the latest information from the world in this city.
Korean and English are compulsory courses for students entering Daewon Foreign Language High School. In this high school, students also need to choose one of the main languages from Chinese, French, Japanese, Spanish or German as the main language for three years of study.
Before 2011, the high school focused on the English listening test and also admitted students based on their scores in other subjects or extracurricular achievements.
Given Do Kwon's birth timeline (1991), we can understand that he has excellent English skills and other academic and extracurricular knowledge.
In his last year of high school, Do Kwon was successfully admitted to Stanford University in the United States through the school's Global Leadership Program (GLP), and began his systematic computer science studies.
The most important factor for Do Kwon's future success was the college time he spent here.
Stanford University is renowned around the world. As of April 2021, the university has produced 85 Nobel Prize winners, 29 Turing Award winners, and 8 Fields Medal winners. The most famous is the technology center and talent highland "Silicon Valley" born here.
Silicon Valley was originally a technology industrial park in the Stanford University district. Through continuous development and expansion, it has spawned a large number of well-known IT companies that have influenced the world. HP, Google, Yahoo, etc. were founded by Stanford students and professors. Other companies such as Facebook, Intel, Apple, Cisco, Oracle, etc. also have offices here.
Influenced by his scientific research predecessors and the atmosphere of technology startups, Do Kwon's heart is also full of entrepreneurial plans and dreams, and he tries to change the world through technology.
In June 2015, Do Kwon officially graduated from university. With excellent academic performance, he worked as an engineer for Apple and Microsoft for a total of three months. At that time, he was still three months away from turning 24. Perhaps due to the natural arrogance of young people, Do Kwon was not satisfied with just obeying his boss and becoming a company employee.
Do Kwon once said in an interview with the media: After graduation, he was disappointed to find that his employer Microsoft lacked "motivation." Among the 40 engineers in his team, only 4 were doing "real work."
So, in September 2015, the month Do Kwon came into this world, he made a decision to give up his high-paying job in a famous company, return to China to start a business, and build his own business empire.
Entrepreneurship: A small test
Do Kwon does not have the hesitation and confusion that ordinary young people have at this age. All he has is boredom and anxiety.
After returning to China, Do Kwon thought about it and finally decided to do something worth his efforts and create it with his own hands.
Thus Anyfi was born.
Anyfi is a company that provides mobile broadband, telecommunications, Wi-Fi and other services. It is headquartered in Gyeonggi Province, South Korea. It was established in 2015 and has a total of 41 patents.
2015 was the year when the popularity of 4G communication networks accelerated. In such an information age, Do Kwon had a lofty entrepreneurial ideal, which was to create a "free connected world."
Do Kwon hopes to allow anyone in the world to have free access to the Internet and telecommunications networks, and anyone can achieve this goal of free interconnection through a "mesh network". At the same time, he also hopes to use the power of the group to start a peer-to-peer service.
To this end, Do Kwon developed Anyfi software, which can help users relay their bandwidth to those who cannot access it, extending the signal range. This idea is very common now, and any mobile phone can open a hotspot, but it was groundbreaking at the time.
Do Kwon founded Anyfi, which has achieved extraordinary success, receiving $1 million in funding from the Korean government, angel funds and early customers, including support from Everland, the most popular theme park in South Korea, which has nearly 6 million visitors per year.
In order to make Anyfi more successful, Do Kwon began to learn about blockchain technology. Because many of the concepts applied by the startup were related to the emerging cryptocurrency industry, he gradually delved into the world of Bitcoin and Ethereum.
It was from this time that Do Kwon's interest and attention shifted. He began looking for partners to explore this emerging field together, and gradually understood the future potential of this industry and its many major drawbacks.
So, Do Kwon really fell into the "crypto rabbit hole" and began to write a white paper to elaborate some ideas about the crypto industry.
Influenced by the decentralized and peer-to-peer network characteristics of Bitcoin, Do Kwon found that it seemed possible to build applications on top of existing cryptocurrency projects such as Bitcoin and use this to create a project that operates as a real currency.
In this project system, a stablecoin can be easily held and used as a payment method both online and offline. Wouldn’t this create an ideal “peer-to-peer digital cash”?
Birth: A game and a business partner
1. StarCraft
StarCraft was once the world's largest e-sports event, produced by Blizzard and launched in the Korean market in 1998. In the following decade, it became a symbol of Korean e-sports and influenced the development of the global e-sports industry.
It reached its peak between 2005 and 2007. Not only were top players invited by the South Korean president to the Blue House to compete in StarCraft, but the total prize money for the league reached 5 billion won, and it was officially recognized as a sport in South Korea.
Do Kwon was 15 or 16 years old at the time. Like other teenagers, he also developed a strong interest in StarCraft. The difference was that Do Kwon could play this difficult game while excelling in his studies.
Even after Do Kwon grew up and had a successful career, he still spent a lot of time playing this game for fun and relaxation.
So to a certain extent, it can be said that StarCraft gave Do Kwon some inspiration to create Terra, but it also affected his perception of the world.
In StarCraft, there are three main races: the Terrans, the descendants of Earthlings; the Zerg, a rapidly evolving biological group; and the Protoss, an ancient race with a high level of civilization and spiritual power. Philosophically speaking, this racial setting reflects three moral qualities, namely "humanity", "animalism" and "divinity".
Terrans are wanderers from Earth, with the advantages of the first two races, and the game is more difficult to control. In order to survive, Terrans are caught up in the war between the Zerg and the Protoss, and the only thing they can rely on is the wisdom of their own group.
The name of the stablecoin project Terra comes from the Terran in StarCraft, and most of the terms in his blockchain project also come from this game.
Do Kwon, on the other hand, seems to see himself as the leader of the "human race", leading the Terrans to expand their territory and resist the invasion of other races.
2. Daniel Shin
Before meeting Do Kwon, Daniel Shin was already a successful entrepreneur.
Daniel Shin graduated from Thomas Jefferson High School of Science and Technology in 2004, and obtained a bachelor's degree in science and economics from the Wharton School of the University of Pennsylvania. He then worked as a business analyst at JPMorgan Chase and McKinsey, and founded TMON and Chai Corporation.
Judging from this resume alone, Shin is an outstanding young man who is no less outstanding than Do Kwon. The two people joined forces and later created a business empire with a valuation of over 40 billion US dollars.
Shin founded Ticket Monster (TMON) in 2010, and the company achieved annual revenue of $288 million in just one year. Six months later, Shin sold TMON to an American company.
In the following years, Shin devoted himself to providing consulting and incubation services to Internet companies in South Korea and Southeast Asia. It was during this process that Shin met Do Kwon, who was also exploring and working hard.
Shin graduated from university in 2008, and Do Kwon in 2015. The generation gap in time and age did not create a barrier between the two. Instead, they developed common interests and established a good partnership.
Shin himself has little exposure to the cryptocurrency industry, but he feels that Do Kwon's work is valuable. Combined with his previous experience in founding TMON, he was able to quickly understand the shortcomings of online payments and various problems in the commercial financial field. He also realized that relying on third-party financial centers for capital activities in the past was too old and inefficient. If a well-designed decentralized online retail service platform for capital is developed, it will be a subversive behavior.
Shin then commercialized Do Kwon's theory of a decentralized and efficient monetary system and used his connections and various resources to quickly commercialize it.
So much so that in the days that followed, Do Kwon always told the media that Shin was "a more practical, number-oriented executor" while he himself was "a very theoretical and abstract person."
After gathering the founding team and other early contributors, Do Kwon and Shin began to work more concretely on their solution, which they eventually named “Terra.”
Glory and warning: the spiral of fate
These were the three most proud years of Do Kwon’s life. They were also the three years when his personal reputation, assets and self-confidence were the most inflated. However, he did not know at that time that the gift given by fate had already been secretly marked with a price. The heavens had also sent down warnings, but Do Kwon had already compared himself to a god.
1. The rising new moon
A sword can only produce greater power when it is paired with a hero.
When Terra was first launched, it was only an initial high-quality project. However, after Daniel Shin joined and worked hard, the team soon attracted a large amount of capital injection.
In late summer of 2018, Terra raised a total of $32 million in investment from well-known cryptocurrency exchanges, including Binance, OKEx and Huobi, and other supporters included TechCrunch founder Michael Arrington, Polychain Capital and Hashed.
In the first round of funding announcement, Shin conveyed to everyone a message: to build a platform on the blockchain that can compete with China's Alipay.
As soon as the news came out, 15 e-commerce companies signed cooperation agreements with Terra, including Woowa Brothers, Pomelo and Tiki. It is worth mentioning that the annual operating volume of these first batch of customers is 25 billion US dollars, which means that Terra will benefit from their business profits.
Terra's success is also inseparable from Terraform Labs' overall construction and control of the project ecosystem, such as being responsible for the creation of stablecoin groups such as Terra and UST and the payment system Chai.
In addition, the entity continues to raise funds, raising a total of US$25 million from Galaxy Digital and other companies in the first half of 2021 as forward momentum.
After that, Terra started its not-so-long road of construction and growth, and Do Kwon himself often posted timely updates on the project progress and community on Medium, and interacted with community members from time to time and listened to their opinions.
Finally, with the start of the violent bull market in the crypto market in 2021, Terra also ushered in its own spring, and successfully became the biggest dark horse in the public chain track in the second wave of the market last year.
On December 24, 2021, Terra’s native token LUNA broke through $100 for the first time and reached a peak of $119.55 in April of this year.
According to statistics from the crypto asset data company CryptoRank at the time, Terra was the blockchain with the fastest growth in total locked value (TVL) in 2021, with a total locked value of approximately US$17.9 billion and an annual growth rate of 35,700%.
The total locked value of the Terra public chain ranks second in the industry, second only to Ethereum's $154 billion, and at the end of the year it surpassed Solana ($11.5 billion), Avalanche ($12 billion) and BSC ($16.7 billion).
The locked-in volume of Terra's native lending rate protocol Anchor once entered the top ten, but the core factor of the growth was the interest rate of up to 20%.
Terra's success brought Do Kwon great fame and wealth.
In 2019, Do Kwon (28 years old) was selected by Forbes as one of the 30 elite representatives under the age of 30, and his name became known all over the world. FTX founder Sam Bankman-Fried (28 years old) was not selected until the following year.
At the same time, as Terra's market value climbed, it also brought Do Kwon countless huge wealth. When the price of LUNA reached $100, some analysts pointed out that Do Kwon may have become a billionaire worth more than $1 billion.
In response, Do Kwon said this might be true, and claimed that he "never really counted".
2. Preview of the crisis
UST emerged stronger after each crash, which gave Do Kwon more confidence and courage, but also increased his blind optimism.
The crypto market has been falling since late May 2021. On the 19th of that month, Bitcoin fell by 30%, and the overall market sentiment also began to fall.
Luna was no exception, with the price dropping to $4.10, a 75% drop from the previous week’s trading price.
Seeing this, investors began to lose confidence in Luna and reduced demand for UST. This directly caused the price of UST to fall below its peg of $1 and prompted more and more holders to exchange their UST for Luna.
However, this run by holders will cause Luna over-issuance, currency inflation, and further decline in token prices, exacerbating a vicious cycle. Many people are worried that a total collapse will trigger a "death spiral."
But the Terra ecosystem withstood the pressure and survived thanks to its previous financial reserves.
However, Do Kwon displays a dismissive attitude towards those who cause death spiral fears.
In addition, Terra's growth and success in withstanding pressure also made Do Kwon's heart swell.
Do Kwon is very proud of the algorithm he designed. He confidently said that the algorithm can keep the cryptocurrency "incredibly stable" and that Luna will be "the largest decentralized currency in the cryptocurrency era."
"Now, bow to the king," Do Kwon wrote on Twitter.
Many crypto professionals have warned Do Kwon of his huge ambitions and issued warnings, while others have questioned Terra's algorithmic stablecoin model.
Do Kwon not only ignored these voices, but also mocked them: "You are all poor people, you don't understand technology!"
He calls those who question him "poor guys" and "cockroaches". If the other party is a colleague, he will say that they have bad intentions and "XX is shit".
Crash: Night of the Eclipse
BTC price fluctuations are deeply affected by the Fed’s policies. Under the impact of continuous interest rate hikes and balance sheet reduction, BTC prices continued to fall and entered a negative decline mode.
During this period, Soros and others in the cryptocurrency circle took advantage of the perfect opportunity when the Federal Reserve's interest rate hike caused a sharp drop in the cryptocurrency market, and set their sights on the fat piece of meat, Terra.
On May 8 this year, Terra moved $150 million of UST to adjust liquidity, but 10 minutes later a new address suddenly sold $84 million of UST, which immediately triggered a wave of selling and panic. On the same day, the price of UST continued to stagnate at the 95 cent level, which further stimulated the selling wave.
As the price of Bitcoin continued to fall, Terra's capital reserves shrank, and Do Kwon was unable to raise enough Bitcoin funds to buy back enough UST. Just as the event in May 2021 repeated itself, a death spiral occurred and investors ran a bank run.
After that, the whole situation quickly got out of control, UST accelerated its decoupling from the US dollar, collapsed completely on the 9th, and depreciated by 99% in 48 hours.
On May 17, the price of LUNA coin almost dropped to zero, and a business empire valued at $40 billion collapsed overnight.
Three months later, Do Kwon appeared in the media and confessed his true feelings to the public: He once thought he was very successful. He tried to raise $2 billion on the night of UST collapse, but the news leaked and the shorts were squeezed quickly. "I wanted to bet big, but I lost"...
"I stayed up all night for several days in a row and I don't remember much. I just didn't notice the passage of time. So even now, if you ask me what happened during the day and what happened at night, I can't tell because I hardly slept, you know, everything was dark." Do Kwon said to the interviewer in a lost tone.
Regarding the detailed analysis before and after the collapse of Terra, Benpao Finance published an article immediately after the incident, "UST de-anchored and led to the collapse of Luna, UST entered a death spiral, why is the stablecoin unstable?", which made a detailed analysis and interpretation of the whole incident.
Looking back, Terra’s collapse was not a doomed game. The failure was more due to the fact that Do Kwon himself showed a side that was even worse than that of ordinary people before and after the incident.
Arrogance: When the problem was already apparent, the team only needed to propose a proposal to decouple from ust to avoid the subsequent deterioration of the situation. However, Do Kwon thought that the ecosystem was large and that the problem could be solved by issuing more luna, but he issued more luna indefinitely... So after LUNA fell by 100%, it could fall several more times, falling into a bottomless price hole.
Fear: At the critical moment, when proposals and voices were needed, the team retreated and only spoke out at the last minute. However, the first thing they said was not a solution, but to explain Terra as a DAO-made project, but this project has developed into an extremely powerful commercial application within the ecosystem. This is obviously an attempt to shirk responsibility and put the blame on the community, on the grounds that Terra is a community-autonomous project and it is the community's fault, not the project's founding team.
Escape: Trying to issue a new currency and use a bubble to cover up another crisis, but at this time, the right time, right place and right people have been lost...
Later, some media also reported that the crypto industry analysts had found a wallet with 19.69 million LUNA 2 tokens and concluded that the address was held by Do Kwon, or it was closely related to him. At the same time, they also pointed out that Do Kwon could earn $3.1 million per month just from staking income.
Recommended topic: " LUNA and UST are deeply trapped in the "big short" "
Judgment: Guilt, Escape
“I don’t think the UST incident involves ethical issues, especially in an industry that requires a lot of technical background to understand. But it is very difficult to give a satisfactory answer when everyone is extremely painful and angry.”
“Are you asking me if I’m short? I’ve never shorted a cryptocurrency in my life, let alone LUNA and UST.”
"If you're doing this for personal gain, that's probably the dumbest way to go about it. Why risk your entire reputation for five years, name your daughter Luna, and then become the most hated person on the internet for a short period of time?"
After the Terra collapse, Do Kwon always claimed to the outside world that he was innocent, denied that he became the beneficiary of the incident by shorting Terra, and said that Terra was not a Ponzi scheme.
But just a week before Terra’s demise, Do Kwon declared on his crypto YouTube channel that “95% of cryptocurrencies will die — but it’s also entertaining to watch companies die.”
Moreover, before the collapse of LUNA and UST, he told his 1 million followers on Twitter: "I love chaos."
Regardless of whether Do Kwon himself was the planner or participant of the entire incident, the fact that Terra collapsed has dealt an extremely serious blow to many investors and the crypto community.
The people most affected by the crash are Koreans, who have at least 500,000 daily active users on Chai. However, their deposited assets were reduced to zero overnight, and the reason was UST and BTC, which had nothing to do with them. This is tantamount to a man-made disaster.
“I lost all my savings in just two days,” an anonymous person wrote on the Korean blockchain community Bitman. “I repeatedly sold Luna at a loss, tried to buy more to reduce the loss, but ended up losing money again. All the 100 million won I worked so hard to earn is gone. Now I don’t want to eat or sleep. I hate myself.”
Foreign media also reported that a man with a malignant tumor received $50,000 in insurance money for treatment, but lost everything in Terra; a man committed suicide after his $2 million LUNA investment fell to only $1,000; many investors have young children in their families...
In addition, the Terra incident also triggered a domino effect in the crypto market, with many crypto institutions going bankrupt one after another. At the same time, this Lehman moment also brought about stricter regulatory policies from government agencies.
What's more, some Korean investors chose to go to Do Kwon's home to ask for an explanation and broadcast it live online.
In response, Do Kwon said: "Someone broke into my apartment building - there were even multiple such cases. Several of them were journalists, some of them were ordinary people, and the personal safety and privacy of me and my family were threatened to a considerable extent."
It was also with this reason that Do Kwon chose to live in exile abroad.
South Korean prosecutors believed that Do Kwon had indirect evidence of fleeing based on his various actions, so the Seoul Southern District Prosecutor's Office applied for an arrest warrant and then requested the South Korean Ministry of Foreign Affairs to forcibly cancel the passports of Do Kwon and five other people, while also requesting Interpol to issue a red warrant for Do Kwon.
But Do Kwon said that the South Korean prosecutors' charges against him for suspected violations of the Capital Markets Act were illegal and entirely "politically motivated."
In addition, Do Kwon also tweeted, "I am not 'on the run'. We fully cooperate with any government agency interested in communicating and have nothing to hide. We are defending ourselves in multiple jurisdictions. We adhere to extremely high standards of integrity and look forward to clarifying the truth in the coming months."
However, Do Kwon never revealed his exact location.
The latest reports on Do Kwon indicate that he has left Singapore, where he has been staying since the Terra crash in early May, and has instead flown to an unknown location via Dubai.
These are just like his life. He once stayed in the richest area, but he was just a passing guest. In the world of fame and fortune, one thought can lead to heaven or hell.
Do Kwon is now over 30 years old. When he looks back at the young man who pursued his dreams of studying, e-sports, and starting a business, he wonders how much he still looks like the same person he used to be.
