Does Do Kwon Control LUNA’s Burn Wallet?

Vignesh Karunanidhi
Does Do Kwon Control LUNA’s Burn Wallet?
Source: MoneyWeek

Do Kwon indeed holds control over LUNA’s burn wallet. Do Kwon himself revealed in a community comment reply on the Agora blog. The entire conversation was below the comment section of Do Kwon’s burn initiative of 88,675,000 LUNA.

Amidst the conversations, a user named moonshot asked Kwon:

Who holds the keys to this burn wallet? I assume it’s multi sig? What backstops are in place to prevent missing funds?

Kwon replied to the user that he controls the burn wallet. Adding to that, he said that stealing 3 billion in LUNA is not his game.

Source: Agora

Analysts questioned Do Kwon and LUNA’s decentralized nature

Terra’s demise paved the way for a slew of theories, losses, reactions, and more. The demise of both LUNA and UST led the community to believe that the network was doomed. Tether’s CTO also said that Terra was poorly designed. The fact that Do Kwon holds control of the burn wallet defeats the whole purpose and legitimacy of the burning process.

Was Terra’s fall predicted way back? An analyst called Jack Niewold wrote a LUNA expose thread where he highlighted some of the key flaws in the project. In one of the tweets, he wrote:

BURNED’ LUNA DOESN’T GET BURNED Previously if you swapped UST for LUNA, it would burn LUNA. NOW, if a user creates UST, some percentage of the LUNA is used to buy BTC. Obviously, this creates inflationary price pressure on LUNA.

Jack Niewold’s tweet

He wrote that it is primarily bad for the price of LUNA, and he also added that it is weird that the burn mechanism has now been used to just market sell and then buy BTC. Jack said that is not deflationary at all.

To put it into contrast, the scenario that burned LUNA is held in Do Kwon’s private wallet, and not even a multisig is weird and dangerous at the same time. Well, the entire failed system killed the entire ecosystem and brought its credibility to the ashes.