CryptoSlate conducted exclusive interviews with multiple Luna validators involved in the LUNA 2.0 relaunch to uncover what happened behind closed doors during the Terra ecosystem's crisis. These validators provided CryptoSlate with unprecedented insights into Terraform Labs and Do Kwon's position, the future trajectory of the LUNA ecosystem, implementation phases, and whether LUNA 2.0 represented the optimal path forward.
Our conversations included two prominent validators, ThorchainMaximalist and FLUOROCARBON, who were actively involved in the 'war room' discussions that preceded the Terra ecosystem's relaunch.
Akiba (CryptoSlate): Do you believe the team was able to operate efficiently enough to successfully launch LUNA 2.0?
FLUOROCARBON: We had individuals all dealing with massive losses, across different timezones, coming from varied backgrounds. The Telegram group was challenging as there were multiple topics occurring simultaneously, with discussions and alliances forming and dissolving while you were asleep. Since no one had prepared for a 'war room' or incident response at this scale, there were no time-stamped summaries or notes being taken, so people knew what happened and most of us had other responsibilities to manage so couldn't spend all time reviewing it. It could have been improved, but it got the job done.
Akiba: Do you believe decisions needed to go through Do Kwon and TFL before being finalized?
FLUOROCARBON: Do [Kwon] & TFL were very hands-off, in my opinion. (you should be able to see this when you read the logs and form your own opinion)
Akiba (CryptoSlate): Do you see a future for the LUNA ecosystem?
FLUOROCARBON: Without IBC compatibility and no gaming capabilities, I don't believe it has much future potential. I actively maintain nodes on the ecosystem and will continue to do so until it has no traffic. People are still using it and seeking value from it.. so who knows it may continue to operate for a while and develop its own community of users.
Akiba (CryptoSlate): Is there anything discussed behind closed doors that you believe should be made public?
FLUOROCARBON: There were numerous sidebar conversations. I don't think it would have been productive making public what people thought about how incompetent certain individuals were. From what I participated in, most sidebar conversations involved accounting, potential ideas, and using trusted members as sounding boards.
I was part of a private group trying to determine who the initial validator set was.
I didn't agree that that conversation (and how individuals voted) should have been made public, but it was and it created significant backlash
Akiba (CryptoSlate): Do you believe there was sufficient time to prepare everything for a fresh blockchain launch in the limited timeframe available?
FLUOROCARBON: I believe the selection of validators was rushed. We've already seen individuals claiming to be validators from other chains, but had no prior relationship with them (1-2 of them). People with no validating experience were told by their friends to 'dm jared' to secure a position.
Akiba (CryptoSlate): Do you believe LUNA 2.0 was the right decision and was the timing appropriate?
Only time will tell. I liked the concept of token vesting, as it has a mechanism to maintain community engagement & builder participation. It will be a hybrid L1 compared to the previous one, but with USDT integration coming soon, most applications should function quite effectively.
It's clear from FLUOROCARBON's responses that significant operational challenges existed when managing the Terra crisis. He makes an important point that the same individuals attempting to save the ecosystem were likely those who had suffered the most substantial losses. The validators were simultaneously dealing with devalued investments while attempting to preserve what remained for the community. At minimum, this offers one perspective on the situation. With those involved in saving the ecosystem also having lost so much, it could be argued that certain inherent biases may have influenced their decision-making processes.
There appears to be no evidence that validators or TFL were acting solely in self-interest. Nevertheless, they were working around the clock during an emotionally charged period. The 'war room' group had to coordinate a multi-national effort to operate a decentralized blockchain running on fumes with only brief breaks every few hours. Moreover, as FLUOROCARBON indicated, they were managing these responsibilities while simultaneously handling other professional and personal obligations.
According to FLUOROCARBON, the future of the LUNA ecosystem is limited, viewing the existing blockchain as unsustainable in its current form. However, the Terra crisis could serve as a valuable case study. While the method by which LUNA was halted, restarted, and subsequently relaunched as LUNA 2.0 will be debated for years, one validator, ThorchainMaximalist, believes the entire incident represents a compelling bullish case for blockchain technology. He stated directly:
“When Lehman Brothers collapsed in 2008, the world was days away from being unable to withdraw money from an ATM. Regulators had to intervene, inject $700B directly into the market and significantly more indirectly through AIG and quantitative easing.
Lehman investors lost all their money. $luna and $ust had a larger market cap than AIG. Every other protocol outside the core ecosystem continued functioning normally. Smart contracts performed their duties without significant failures. Much of the crypto infrastructure is built on first principles and designed to be trustless and antifragile.
The architecture is far more resilient and requires significantly less trust. Within just a week, the equivalent of a bankruptcy reorganization was implemented and fully executed. Approximately $10B of that value was returned to original investors. If fraud is prosecuted by the authorities, they will see their day in court.”
