USDN falls and some accuse Waves of being a scam...

In the crypto family that is currently in the storm, I ask for Waves. In general, there is very little talk about the Waves blockchain because few protocols are built on the network.

But these days, Waves is in the spotlight and it's not necessarily for the right reasons.

Rise and fall in the same week

Just 4 days ago, it was the 7th crypto in terms of TVL in DeFi. Basically, users deposited tokens into protocols built on the Waves blockchain.

On March 31, Waves token reached an all-time high of $62. A few days later, the price dropped back to around $36. The token lost more than 25% of its value in 24 hours. It's not nothing.

But the worst was recorded for the stablecoin indexed to dollars: USDN. It literally lost its anchor to the dollar, causing it to plunge to $0,68.

coinmarket cap USDN neutrino — A very red signal...

So, of course, cryptos are volatile and we are starting to get used to these roller coasters.

On this point, we agree.

That said, this has reawakened old tensions around Waves and its founder. Let's see what comes out of this.

The accusations against USDN (and Waves)

Waves is a layer 1 blockchain which therefore offers the creation of smart contracts. Each user and developer can launch their own dApp easily on the Waves network. It’s just as easy to create tokens as well.

Waves had introduced an algorithmic stablecoin USD Neutrino which is backed by Waves tokens.

In fact, by staking USDN, users receive Waves tokens. Finally and mathematically, the return on this staking then depends on the value of the Waves.

On March 31, while the Waves token was experiencing a shameless ATH, a pseudonymous analyst on Twitter named @0xHamZ posted a long tweet. He calls Waves “Crypto’s Biggest Ponzi.”

Just that.

twitter versus waves — You can read the entire Thread here

For this analysis, it is necessary to have continuous growth in market capitalization for the system to be viable.

So, he explains that the flow or process of Waves would be as follows:

Here is the flow used to manipulate the scale:
-USDN deposit in Vires
-Borrow USDC on Vires
-Transfer USDC to Binance
-Buy WAVES with USDC
-Convert WAVES to USDN
-Restart

What the defense says

The founder of the Waves platform Sasha Ivanov claims that there is instead a manipulation of the token market.

He claims that 0xHamZ's tweet is part of a plot to discredit the Waves platform. He says that this is partly due to the fact that before the Russian invasion, Waves was referred to as the "Russian Ethereum"... This could have led to people wanting to trash Waves.

Likewise, on Waves' Twitter, we saw several times that the company reminded that the offices were no longer located in Russia but in Miami. Likewise, founder Ivanov claims both Russian and Ukrainian nationality.

Note: It is very important not to conflate the Russian population with the Russian government. It seems that some people do it...

Sasha Ivanov accuses Alameda Research, a crypto trading company (founded by FTX CEO Sam Bankman-Fried) of manipulating prices. He claims that Alameda Research is trying to sell the token to make profits. For this, Ivanov shows that at the end of February, beginning of March, there was a sharp increase in the supply of Waves on the FTX exchange.

Likewise, market manipulators would use the Vires protocol to profit as well.

Conclusion on the future of USDN and Waves…

Bankman-Fried responded that this was all stupid. However, Ivanov did not give up. He proposed a collective vote to the members of Waves to resolve the situation and reduce rates, particularly on Swap.fi and especially Vires….

So what do we think of this whole story?

Honestly, everyone is going to have an opinion on the matter obviously because we like to be judges, don't we?

We should continue and continue the investigation initially. It should also be remembered that Waves has existed since 2016 and that this is not the first storm that the blockchain will have to weather.

Personally, we benefited from the rise in Waves and we cannot comment too quickly. Of course, we remain suspicious, even more than usual….

Now, regarding USDN and the Waves token, we need to see how the #WavesArmy will fight. For them, it’s a good time to jump on the bandwagon and buy Waves and even USDN…🤪

There is also talk of developing the Waves ecosystem which suffers cruelly from few protocols….

This is what Waves needs to develop rather than waiting for traders...

So, business to follow. Count on us, we’ll keep you informed…

Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.

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