Some saw it coming. In 2018, Cyrus Younessi, an analyst at crypto investment firm Scalar Capital, saw UST’s white paper and immediately warned his boss. The algorithm pegging Kwon’s stablecoin to the greenback, Younessi said, could one day fail and cause a “death spiral” if Terra’s ecosystem was drained of capital too quickly.
Younessi wasn’t alone. A small chorus in the industry warned of Terra’s danger and instability, including Charles Cascarilla, CEO of stablecoin issuer Paxos, which publishes monthly attestations that its Paxos dollar is backed 1:1 with fiat reserves and debt instruments, and Kevin Zhou, co-founder of crypto trading fund Galois Capital.
Kwon, 30, dismissed their concerns with more trash talk.
But now, even Kwon has to concede that Younessi, Cascarilla, and Zhou were right all along. After all, he drove the final nail in UST’s coffin himself.
Hubris is commonly thought of as excessive pride, although that’s not how Aristotle used it: “Hubris consists in doing and saying things that cause shame to the victim … simply for the pleasure of it. Young men and the rich are hubristic because they think they are better than other people.”
Two millennia later, Aristotle may be a pile of bones, but his words paint a living portrait of Kwon, the CEO who not only believed he was too smart and too popular to fail, but who…