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It is not a ponzi. The 20% they were paying out should be considered a cost of user acquisition paid out by the team themselves. If paying incentives to attract users is a crime, we’d have to shutter most startups.

I’m not defending Terra, but we should be precise with our words lest we escape reality ourselves.



Cost of acquisition?! Were the holders investors or customers? Again, how were they funding the 20%?


The source of funding was the initial LUNA tokens that were allocated to Terra (or Do Kwon personally?).

I think it was broadly understood that 20% yield wasn't going to be sustainable, but was a tool for short-term user acquisition.




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