The Reasons Why Waves Price Dropped - Alameda Research (FTX Exchange) Case
Waves coin and the stable coin backed by Waves (Neutrino USD) are losing their value due to the FUD going around. When we check the last week performance of the coin, we can clearly see that there was a hype going around the tokens in Waves ecosystem. However, the case is exactly opposite as of writing.
A couple of days ago, I share a post about the pump in Waves and explained the reasons why Waves token has increased in value. The partnership, Waves 2.0 EVM updates and new US market operations were some of the reasons.
Unfortunately, I'm going to talk about some doubtful things taking place between Alameda Research (FTX Exchange) and Waves developer team. I've been in Waves ecosystem since 2017. I still have investment in Waves Exchange, Vires, WavesDucks and PuzzleSwap. Even though these are amazing projects, they are also negatively affected with the FUD.
The Tweet!
This was the first tweet that went viral over claim that the price manipulation is taking place in Waves ecosystem.
Okay but, how is it possible? Actually, there is a cross-chain De-Fi /Lending project named Vires.Finance operating on Waves blockchain. Any person can connect his/her Metamask or Waves Keeper to get borrow or lend assets to collateralize them for funds.
You are getting both supply APY + Vires tokens (%1-0.25) or you borrow with some APR - Vires APR. Then the earnings are distributed to Vires token holders. The mechanism was working perfectly fine for investors like me until the day when the APY rates went crazy.
When I realized that the USDN peg is broken and the APR rates are unrealistic, I withdraw my supplies immediately. However, there is a problem with the pegging because there are already some investors that help USDN stay stable -> NSBT Token.
Neutrino Protocol is designed to sustain the peg form of USDN via exchanging Waves for always $1 worth of 1 USDN token. Thus, arbitrage is a profitable option for NSBT holders to end up the spread between the price in the market and $1 peg. Yet, FUD was too strong to let it happen...
The Claim that Waves Team Manipulated the Market
As I mentioned above, it all started happening with some tweets that accuse the Waves developers to utilize USDC USDT in Vires Lending to pump Waves token. Meanwhile, the peg had long been broken between USDN stable coins. Eventually, the FUD started to grow.
The Side of Waves Team - Alameda Shorts Waves
After around a day, Sasha posted a tweet flood to explain the reasons and the way FTX group shorts and creates FUD on Waves token.
According to Sasha, FTX team deposits USDC & USDT to Vires and they borrow Waves to short on Binance! But why?
According to Sasha's claim, FTX wanted to list Waves if the team pay $1.5M for listing. When Sasha refused this proposal, the team started shorting Waves. However, Waves was skyrocketing and Alameda team's positions were red. Thus, they dump the token and created FUD to make decent gains as they are going to pay %80 Borrow Debt to Vires.
Sasha's Hostile Proposal
Sasha proposed that Vires platform may re-design the smart contracts to liquidate the borrowed Waves so that Alameda Research cannot achieve their evil goal. However, it was rejected by many Waves investors as it is against decentralization and freedom!
Until Sasha decided to go harsh in "doubtful" way, there were many more supporters of their fight for freedom. Yet, I was disappointed with this proposal 😪
Note: Sasha also disclosed Waves wallet of Alameda to prove things. Yet, it was another issue that was not appreciated by community members.
Who is right?
I still think that the FUD is too much because USDN is still secured by NSBT token + Neutrino mechanism and the price went down to reach its intrinsic value + Vires funds are secure. Even if the claims of Sasha are true, it was the worst way to prove that they are fighting against evil.
However, the negative news about Waves ecosystem destroyed the reputation of project and made people consider the cedibility of USDT, USDN and many other stablecoins (excluding HBD -> TaskMaster explains very well) It looks like both Waves team and Alameda Resarch group made some mistakes that ruined the credibility of them.
TL;DR
Both Waves team and some crypto investors have some claims about the market manipulation in crypto ecosystem. According to Waves team, Alameda Resarch (FTX) put $80M stablecoins to Vires finance as collateral to grab some Waves so that it can be shorted. However, when the team lost money in their failed short attempts in the bull-run, they created FUD and shorted Waves again to hedge their loses + pay their borrowed loans.
Some crypto investors, on the other hand, claim that Waves team was using stablecoin supplies of people to pump Waves by themselves. Besides, the proposals that were based on liquidating the positions of Alameda group by re-designing smart contracts were rejected and it was the worst decision by the team that was against decentralization.
In the end, we still do not know who is right in their claim. However, CEXs are not trustworthy parties that we can easily rely on. Thus, I feel closer to the claims by Waves team.
What do you think about the problem?
Posted Using LeoFinance Beta
