On March 14, 2022, cryptocurrency trader GiganticRebirth (GCR) challenged Do Kwon, co-founder, and then-CEO of Terraform Labs, to a $10 million wager that the price of Terra Luna (LUNC) would be lower in a year than its then-price of $92.4 per token.
The second in a series of offers were accepted by the blockchain executive. The previous day, cryptocurrency trader Algod placed a $1 million wager that LUNC would be worth less than $88 per token on March 13, 2023, which Kwon accepted. This resulted in two wagers for $11 million and a $22 million prize pool.
Cobie, a blockchain star, kept the $22 million in escrow on his Ethereum address. Cobie stated at the time that participants received a hot wallet “on my mobile phone while I was in the middle of Africa, and when I woke up there was $22 million deposited.”
“I didn’t want 22m on a mobile tent while I was living in a tent amongst lions lmao.”
According to Cobie and supported by blockchain statistics, the blockchain personality paid out the wagers from the hot wallet in April 2022, just after the $40 billion LUNC and associated algorithmic stablecoin Terra USD (USTC) ecosystem crashed, with LUNC trading near zero. Cobie, on the other hand, declared in December 2022:
“I actually paid out the bet shortly after Luna went to 0, and then bought enough Luna to hedge in case it somehow went back to $88. But I lost my hedge (custodied in FTX) so if Luna goes to $88 in the next 3 months I am fucked”
Cobie was compelled to keep collateral notwithstanding LUNC’s failure since the money was paid out early and conditions could alter at settlement because the bet was live until mid-March 2023. LUNC was selling at $0.000124 per token at the time of writing.
Last November, FTX, the world’s third-largest cryptocurrency exchange by volume, declared bankruptcy due to suspicions of misappropriation of customer funds, freezing the balances of over 1 million debtors. Cobie paid the prize money and principal, totaling $22 million in stablecoins, to winners GCR and Algod via FTX on April 4, 2022. The flow of funding after that is unknown.
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