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Still stinging badly are the huge losses suffered by Luna investors after the implosion of the Terra ecosystem.
Neither did the news of the issuance of an arrest warrant for founder Do Kwon by authorities in South Korea soothe tempers, because Kwon is not in his home country and therefore authorities cannot arrest him.
Indeed, a full-scale fanfare broke out after the news was published, particularly among those who hope that the authorities will be able to catch and arrest him.
Meanwhile, the price of the cryptocurrency Luna 2 (LUNA) has fallen from $4.3 to $2.9, after touching $7 in previous days. It is now at -85% from the highs of four months ago, which was when it debuted in the markets after the implosion of the previous cryptocurrency bearing the same name.
Jail Kwon: speculation about the arrest warrant for Do Kwon
This kind of stadium cheering against Do Kwon materialized in a new token called “Jail Kwon” (JKWON). The token had actually been launched before at the beginning of September, but initially it had not met with much success.
With the latest events, however, its market price has skyrocketed from 0.18 mills to 1.10 mills in the space of a few hours, a gain of more than 500% in less than 24 hours. Even for a very volatile market like cryptocurrency, this remains a more than resounding achievement.
Thereafter, enthusiasm was dampened, so much so that the price in the following two days dropped to 0.6 thousandths of a dollar.
Jail Kwon was created following the implosion of the Terra ecosystem by some investors who lost a lot of money because of that event.
It is worth mentioning, that from the first moment after the implosion rumors began to circulate about hypothetical fraudulent activity on the part of the ecosystem managers, so much so that it did not take long for the Korean authorities to let it be known that they had opened an investigation.
That investigation resulted in the issuance of an arrest warrant a few days ago, precisely because of the explicit allegations against Do Kwon of committing wrongdoing.
Moreover, Kwon was under investigation even before Terra’s collapse, for old issues that had not yet resulted in anything concrete.
In such a scenario, it is quite logical that on the one hand the judicial authorities, and on the other hand the investors, became increasingly inclined to believe that Do Kwon had some kind of criminal responsibility for what happened, and each decided to proceed by putting forth what they could.
If the Korean judiciary opted for an arrest warrant, investors, on the other hand, created a token on which to vent their frustrations.
The real goals of the JKWON token
In reality, there is also a project behind the Jail Kwon token that aims to educate people about cryptocurrencies.
The JKWON token is given as a form of payment to contributors who produce crypto-themed educational pieces.
In South Korea in particular, the project is enjoying a fair amount of success, as is also shown quite clearly by the price performance of the token on the crypto markets in recent days.
The fact is that this could go on for a while longer, so this could be one of those tokens on which interest could suddenly mount, even for more than once.
Jail Kwon was launched on BNB Chain and is tradable on PancakeSwap under the ticker JKWON.
This might be the first case of an Educate-to-Earn project, while the whitepaper states that the mission is to combine Web3 with Web2 to provide something unique to the cryptocurrency market by leveraging Do Kwon’s relevance and social media presence and Luna’s crash.
It is worth noting that they have also created a special website, educate2earn.app, where you can earn JKWON tokens by creating educational content and posting it on social.
Although this is an interesting idea to follow, since it is the first of its kind to be successful, it is also possible that it is a way on the part of its creators to try to make back even partially from the losses incurred with Luna and UST.
The official website states that the team decided to start this project to try to teach the community what to pay attention to in order to avoid the dangers in the crypto sector.
They write:
“We cant help thinking if people had known how algorithmic stable-coins worked, there would have been a lot less losses on record.”
The need to educate the community after Terra’s collapse
The problem that caused the entire Terra ecosystem to implode was the collapse of the algorithmic stablecoin UST, itself based on the cryptocurrency Luna. When the collapse of Luna’s value began, UST failed to maintain parity with the dollar and ended up imploding, taking the entire Terra ecosystem, which was based precisely on UST, with it.
The hypothesis of Jail Kwon’s team is that if more people had known how UST really worked they could have avoided huge losses.
Their website also states that the E2E (Educate-to-Earn) dAPP will not start working until after the launch of Pinksale.
The roadmap shown is long and ambitious, and one part has already even been completed.
Therefore, this is not just a token launched out of mockery and frustration, but a project that seems to at least have the ambition to go beyond just launching a token on the market.
Indeed, as the spike from a few days ago shows, the crypto markets for now still seem to see it primarily as a token to bet on Do Kwon sooner or later being arrested and convicted. Moreover, in the long run, its use as a reward for those who produce educational content could end up increasing supply in the market, and thus also increasing sales pressure.
At this time, it is difficult to imagine the timing of Do Kwon’s eventual arrest and conviction, although so far they have not been particularly diluted.
It must be said, however, that an arrest, which could also come at any moment, would be one thing; an eventual conviction would be quite another, both because it is by no means a foregone conclusion that he will be convicted and because a lengthy judicial process will presumably be required to get there.
The success of the Jail Kwon token at the height of the bear market shows very clearly how investors and speculators are still mad about the events involving Do Kwon and the Terra ecosystem, and how many people are rooting for him to be arrested and convicted.
In such a scenario, it seems very difficult indeed for the new Terra/Luna ecosystem, without UST, to have a clear and bright future.
In particular, should Do Kwon be convicted, his presence in the new Terra team could harm the new project. Moreover, he is not even the only one under investigation, because South Korean authorities have also issued other arrest warrants for other members of the previous team.
A possible conviction of several members of that team could destroy the reputation of the new Terra/Luna project as well, but getting a conviction could take many months, if not several years. And in the meantime, things could change.