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Terra Founder Do Kwon Loses $11 Million Bet After LUNA Collapse  

2 mins
Updated by Ryan James
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In Brief

  • Do Kwon effectively lost $11 million in a bet on the price LUNA.
  • The "bet was lost the moment Do Kwon forked (the Terra blockchain) and airdropped (LUNA)," critics say.
  • Kwon had remained confident that LUNA, criticized as an "overpriced Ponzi", would not fail.
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Embattled Terra founder Do Kwon has effectively lost a total of $11 million on a bet that he took against two cryptocurrency traders in March regarding the future price of LUNA.

Self-proclaimed “semi-retired degen” Algod this week claimed victory in his $1 million portion of the wager. He tweeted that the “bet was lost the moment he [Do Kwon] forked and airdropped.”

Algod, who criticized LUNA as an “overpriced Ponzi”, was responding to a suggestion that the new LUNA could spring a surprise and rally beyond the bet’s mark price of $88, making Kwon the winner.

The duo took a wager on the future price of LUNA, the native token of the Terra ecosystem. They each placed $1 million in a bet in which Kwon believed that LUNA would trade above $88 by March 14 2023 – exactly one year from the day of the bet.

Terra CEO took $10 million bet

Confident that the token would not fail, the Terra CEO accepted yet another bet of $10 million with pseudonymous cryptocurrency trader Gigantic Rebirth, under the same conditions as those agreed with Algod.

In total, all the parties involved agreed to transfer the equivalent of $22 million in stablecoins to an escrow wallet managed by crypto influencer Jordan Fish, popularly known as Cobie, which he would send to the winner on a pro rata basis.

Do Kwon may now have lost both bets after the price of LUNA crashed to $0 in May. His latest effort to save the token – and the bet – by splitting the blockchain into a new chain called Terra 2.0 will not suffice.

According to the terms of the bet, the parties agreed LUNA would stay the same denomination and that the wager would not cover “hard fork” risk. But Kwon has created two separate tokens: LUNA Classic, representing the old chain and subject to the bet, and LUNA for the new chain.

“[It] was agreed that changing the tokenomics would cause an instant loss for Do [Kwon]. So, new LUNA is already void from the bet,” Cobie, custodian and arbiter of the wager, explained. It is not clear whether Cobie had transferred the money to the winners.

At the time of writing, LUNA Classic was worth virtually nothing, or $0.00009, while the new LUNA traded 12% down at $6.41 over the previous 24 hours, according to CoinGecko. Both Algod and Gigantic Rebirth have been vocal critics of Terra, much to the chagrin of Kwon. The traders have now been vindicated, with the collapse of LUNA.

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Jeffrey Gogo
Jeffrey Gogo is a Zimbabwean financial journalist with more than 18 years of experience covering local and global financial markets; economic and company news. A climate change enthusiast, Gogo first encountered bitcoin in 2014 and began covering crypto markets in 2017.