Waves Stablecoin USDN Tumbles 10%, Founder Accuses Alameda of Price Manipulation

By | April 5, 2022



Neutrino, the algorithmic price-stable assetization protocol, serves as an accessible DeFi toolkit. It was built on top of the Waves blockchain and had managed to almost double its market cap in less than a month.

However, the protocol’s stablecoin project – USDN – de-pegged after sliding down to a low of $0.83 and losing 15% over the past 24-hours. WAVES, the token backing the stablecoin, recorded an even worse decline – by more than 20%.

The founder of Waves Protocol, Sasha Ivanov, accused Alameda Research of manipulating the price and shorting. He also claimed that the address indicating borrowing and selling activity of the dollar-pegged token is linked to the SBF-backed cryptocurrency trading firm.

BS Conspiracy Theory?

Following the latest crash, Ivanov contended that someone reached out to him via Vires Finance to borrow one million WAVES tokens, a request he claimed to have turned down, citing company policy and also assuming that this could be used for shorting. Upon further research, Ivanov asserted that the address behind this was linked to Alameda Research.

SBF dismissed the entire fiasco and tweeted,

Many in the crypto realm have called out the Waves project for being a Ponzi scheme. Some speculated that its recent highs were attained by borrowing USDC stablecoin to purchase its native token, artificially inflating the price of WAVES.

Twitter user 0xHamZ recently alleged its initial appreciation was due to its recognition as “Russian Ethereum.” They also claimed that the project was burning WAVES to mint its flagship stablecoin USDN and then depositing the latter on the blockchain’s native DeFi lending platform, Vires, and borrowing USDC from the protocol.

WAVES price surge earlier last month coincided with Russia’s invasion of Ukraine. Interestingly, this was noted by Peter Guo, a researcher at Hong Kong-based crypto investment firm Babel. He stated that “some people could be rushing into Waves in response to potential economic sanctions and limited traditional payment channels.”

However, Ivanov asserted that neither the Waves project nor himself had any ties with Russia. Instead, the founder believes the growth has been organic.

The Aftermath

Following the incident, Ivanov announced that a new DAO protocol change proposal had been submitted to Vires Finance. It aims to reduce the liquidation threshold for Waves and USDN borrowing to 0.1% temporarily while limiting the maximum borrow APR to be 40% in order to prevent market manipulation.

However, the crypto Twitter was not impressed. In fact, the latest de-peg of USDN has erupted concerns for UST due to the similarity of the two in terms of utility and depth of liquidity.

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