Sept 02, 2021 AMA with Do Kwon: Terra Money's Col-5 Upgrade Now Delayed

Intro & Disclaimers

This is basically exactly what it sounds like: the notes and quotes that we recorded during this AMA. We did this for our own content purposes. However, we are releasing it to our readers because we believe it may prove helpful.

To be clear, we do not own the content of the podcast and/or video at-hand in any regard. The italicized text generally denotes an actual quote; but quotes are not guaranteed to be 100%, exactly word-for-word. This document is simply DeFi Puma’s internal notes reporting on the events as we heard them. Enjoy.

Terra Money AMA Session with Do Kwon. Hosted on Twitter from approx. 01:15 - 02:15 UTC on 02 September, 2021.

AMA Questions & Answers

NOTE: This is NOT a complete list of all the questions, nor does it fully capture all of Do Kwon’s answers.

On the Columbus-5 Upgrade...

1. What would you say, in your opinion, is the main reason for pushing back the launch of Col-5?
2. Just about a week ago, there was a new upgrade to Cosmos SDK. They discovered a low-grade security issue with IBC….so, given all the preparations we’ve been doing, we thought it would be good to give it a few more weeks to really make sure all the ducks are in order.
3. We don’t want anything to break given the size of the community.
4. Are all the projects that are coming soon going to wait for the Col-5 to launch?
5. I have no visibility.
6. No [I’m not involved directly].
7. In regards to future insurance protocols, I’m curious to what that may look like in Terra with DeFi?
8. Since May, we’ve been very active in engaging with insurance protocols.
9. I think we’ve been getting pretty good coverage.
10. The challenge is sizing.
11. Anchor has around $4 billion in TVL right now – but the amount of insurance is in the tens of millions.
12. So, scaling insurance will take some time
13. How confident is TFL in Terra’s blockchain security?
14. We’ve been working on this for a long time
15. We’ve been putting the vast majority of our engineering resources toward this to [make sure that it’s ready to launch]
16. Nothing is perfect but we are pretty confident that things will go well.
17. In less than 30 seconds, what is Col-5 and why is it not a “sell the news” type of event?
18. First of all, you can sell whatever you want.
19. Col-5 does two things:
20. It results in every bit of LUNA that is used to mint UST being burned
21. It increases staking rewards because swaps between LUNA to Terra and
22. We are projecting that staking rewards are going to go from something like 5% annually (minus airdrops) into the double digits.
23. Also – lots of upgrades (Max gas cap is now 34x what it is currently…this means it can handle many more applications)

On gov't matters...

1. Would you consider yourself a libertarian?
2. Um, I would consider myself as a “not-dumb-shit”-ist situationIf that is libertarian, sure.When it comes to the use of money, I believe in very few simple principles:
3. Protection of private property is reason the govt existsOverall, I think there is overreach of regulatory powers where those property rights are no longer being respected in the name of investor protectionI think it’s time that the pendulum swings in the opposite direction
4. We know the gov’t comes after anything they can’t control or things that threaten the dollar. Say UST grows to $1 trillion market cap? Would that compete with the dollar?
5. I don’t think that, at a trillion, it can compete with the dollar
6. Add three zeros to that and maybe
7. I think that, at a trillion, it will be at escape velocity and be able to compete
8. At a trillion, it would be comparable to supply of KRW
9. It would def lay low fiat currencies below KRW
10. Once that happens and it becomes super useful in lots of countries, I think [that’s when it reaches escape velocity]
11. Are there any plans for bLUNA validators to be anonymous? It seems like, if the validators are known, they’d be easy target for regulators.
12. It’s kinda hard for me to understand how regulators who think that algo stablecoins under their purview would also [go after bLUNA validators]
13. I can’t really think of a legal construct that would bind those things together.
14. I mean, they can’t berate bLUNA validators for operating on same platform that they consider to be
15. I think it’s going to be very difficult to bring algorithmic stablecoins under a framework like Tether or USDC because there’s no centralized issuer.
16. Anyone can burn LUNA and make stablecoins… and redemption is also possible.
17. I think that means there is no conception of a centralized broker-dealer.
18. So, I don’t think that algo stablecoins are a big concern for any of the regulators we’ve been monitoring.
19. What are your thoughts on everything with [the Korean city] of Busan and your involvement with them?
20. Just in general, given that it’s a gov’t project, we aren’t at liberty to share too much
21. It’s just that the pace at which gov’t projects happen…..it’s much slower than crypto projects.
22. I think most people in the community are probably appreciative of this
23. I don’t have much to share at this moment but I will as soon as I am able

On NFTs...

1. What do you think of NFTs in general?
2. I think the premise of NFTs….
3. I mean, tokens, in a fungible or non-fungible form…there is little distinction
4. The more places you can get that token used or the value props….that make it more useful
5. As the space matures and there are more things you can do with NFTs, the more useful it gets.
6. I see the end-game of NFTs being that of allowing property rights for digital scarcity across metaverses.
7. There was no way to build up private property across metaverses…which was a limiting factor because a lot of things that drive human incentives scarcity.
8. I think you are going to have NFT property rights respected in Twitter [and across other spaces].
9. I think that’s going to create a method of digital scarcity that will be valuable
10. I don’t think, similar to how many ICOs aren’t worth anything now, I don’t think that different NFT rocks are going to be worth more than Ether a few years from now.
11. I think many NFTs are going to be worthless – not that they all are – but most of them are.
12. Tread with caution.

On future adoption of Terra Money...

1. How do you see mass adoption occurring (esp. in the west)? Are there any payment applications that you could potentially see Terra having a really active role?
2. Yeah, I think what’s going to bring mainstream adoption is the dissonance between Anchor’s 19% and Wells Fargo .5% interest in their savings accounts.
3. That’s it. It’s that simple.
4. If you can offer a facility by which average households can deposit their household savings into something like Anchor and get a much higher yield in their savings account or other protocols, that’s going to [cause mass adoption].
5. Money at rest can set money in motio
6. Do you have any plans to support countries with poor financial systems?
7. We don’t have a roadmap to support specific geographies. I think:
8. We want to [empower teams to build]
9. We wat to make sure that the infrastructure around Terra is strong so that cost of building on Terra is minimized
10. Any plans for bringing more dev?
11. Any plans for bringing more devs to Terra Money?
12. We’d love to bring more developers.
13. But, honestly, the amount of dev interest we got in the first 6 months was very, very large.
14. So We are working on Spacecamp and trying to ensure that devs have resources.
15. I think right now we have the base things that bring devs into blockchain ecosystems, community fund that is quite large, and lots of VCs that want to invest – from what I can tell – every Terra-related round has been oversubscribed.
16. We also have [lots of resources] so people can get the requisite advice
17. We have vibrant community of other contributors like SmartStake and [other content producers].
18. Some of the things that are missing I think are around dev tooling. I think documentation could use a revamp as well as [tutorials].
19. Those are some of the things we are working on in our next revamp.

On random stuff...

1. What do you think the role of the community should be in raising flags about scams?
2. In terms of pointing out scams… well, what constitutes a scam is relative.As community members, I think what we should do is:
3. Not invest in scamsIf  you can be vocal about what aspects of it you think are a scam….I think that’s helpfulBut, ultimately, with these things… there isn’t a whole lot you can do. You can’t call the police on these guys.**Moderator**: we have a new discord channel for what people think are scams. So, if you go and visit Discord channel, that’s a good starting point. We don’t want to throw projects under the bus [without evidence]….so that’s a good place to get started.
4. Do you have plans to ensure that supply of LUNA doesn’t get dumped? I know that the ownership of the tokens is a bit centralized.
5. Let’s talk about this from two angles:
6. In context of Terra’s launch (circa 2018), it was sort of like a typical token distribution that you saw with lots of projects those days. Infrastructure around DAOs treasuries was a lot less sufficient; so you generally saw team allocating money for marketing….so that they could do ……if we were to redo Terra in 2021, I think we would design (say Yearn or Sushi….or others. What I will say about how TFL manages its current treasury: just as a rule, we don’t really sell LUNA to the market. We sometimes use LUNA to raise additional funds. With passage of time, we might do that from time to time. But, as a rule, it’s not a situation where we deploy our token-holdings . Generally, we are a net buy….we have to buy LUNA to mint UST.
7. Eventually, the state we’d like to get to…we see TFL as a transient aberration. It’s quite early – TFL [plays the role of coordinating].
8. But eventually, when there are tens of billions of stablecoins… I don’t see a reason for TFL to exist.
9. At that point, we will try to find a way to return the funds to the community or *inaudible* in perpetuity.
10. It can be annoying that TFL exists.
11. But bear with us a little longer because we will eventually disappear.
12. How are thing going with Chai in Vietnam and Korea? How are things outside of the crypto world?
13. At this point, I’m only very loosely involved with Chai
14. I go to board meetings – and even then, if I have something – I may skip some of that
15. But from what I can tell, over the last year, overall growth has been rather stagnate.
16. But certain segments
17. In terms of e-wallets, [growth] has been relatively flat
18. I think its card business is doing quite well. It’s starting to downscale it’s app
19. Chai card tx volume is more than 50% of all volume down on Chai….and there is a long list of hundreds of thousands who want the card
20. I think it’s gateway business is doing pretty well….volumes for that, I think that they are probably going to get close $6 billion in tx this year.
21. But payment gateway business is fundamentally different from how e-wallets operate. So, a little less interesting.
22. What’s the relationship between the ERC-20 token of UST vs what’s found on Terra blockchain?
23. It’s minted on Terra and then it’s bridged over using a service called shuttle
24. But, there is gonna be native Terra assets coming to Coinbase around Q4 timeline
25. What are your thoughts on decentralized social media platforms in crypto? How far can they get adopted?
26. I don’t know too much about social media
27. Up until second half of last year, I wasn’t very active on twitter
28. I don’t have a strong opinion…but it stands to reason that if ppl are doing everything else in decentralized context, they would be appreciative of engaging with each other in that context
29. But I don’t much about the projects today
30. With so many projects launching on Terra with Col-5, what do you think the emerging IDO platform will be and what do you think will be the way to keep people [from dumping]?
31. Pylon started as a TFL project; people working on it were at TFL.
32. So, Pylon is its own entity… we have no ownership in Pylon or MINE tokens
33. So, from TFL perspective, we are neutral for launchpads within community.
34. I think Pylon is exciting; I think StarTerra is exciting.
35. Several things about IDO platforms:
36. Due diligence: for investors that don’t have time to do due diligence, they can trust the Coinlist brand to do that on their behalf. They also expect that IDO platforms can put the project in digestible chunks.
37. Way for people to contribute projects without getting rugpulled….and Pylon pays developers, [you won’t lose]
38. I think way for this to go is to give stakers more control over governance pools
39. So, for example, right now Pylon doesn’t have facility for people to withdraw their deposits.
40. But, if Pylon gives ability for stakers to withdraw their funds.
41. Or, for example, they should give outright governance to stakers in the first place.
42. So, it’s kinda like an ongoing kickstarter platform
43. It’s not a good idea to Terra deposit funds into a pool and assume that it won’t be front-run by bots.

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