On March 31 WAVES reached a new all-time-high of $62.36. Three days prior to reaching a new all-time-high WAVES was trading for just under $32. But within the next 24 hours the price has headed back down to around $36 again.
At the same time, the Waves-based stablecoin USD Neutrino has lost its peg to the dollar, dipping to $0.68. As of now, the USDN managed to get back to over $0.90.
What is Waves?
Similar to Ethereum, Waves is a layer 1 blockchain that features smart contracts and allows people to launch their own applications and tokens.
Like Terra, its most popular feature has been its own algorithmic stablecoin called USD Neutrino (USDN). The USD Neutrino is backed by WAVES and people who choose to stake their USDN get rewarded in WAVES.
On March 31, a Twitter user going by the name oxHamZ published a long thread where he called the Waves Platform 'the biggest ponzi in crypto'. He underlined that statement with data, that showed that the stablecoin system can only be stable if there is continuous growth in WAVES' market cap.
WAVES is the biggest ponzi in crypto
— 0xHamZ (@0xHamz) March 31, 2022
It has recklessly engineered price spikes by borrowing USDC at 35% to buy its own token
Continuous WAVES market cap growth is needed to keep the system stable
WAVES will eventually crash and USDN will break with it
You're on notice🧵
Meanwhile the founder of Waves Platform Sasha Ivanov claims that Alameda Research, a trading firm founded by Sam Bankman-Fried, has been manipulating the price and attempting to bring the price of the asset down in order to make money by shorting it.
Reacting to Ivanov's statement, Bankman-Fried called it a 'bullshit conspiracy theory'. Alameda CEO Sam Trabucco responded to Ivanov's tweet saying 'People should really look at funding rates for WAVES right now.'
Trabucco didn't elaborate how those rates - negative at the time - affected the strategy of Alameda Research.
Get your popcorn ready: @AlamedaResearch manipulates $waves price and organizes FUD campaigns to trigger panic selling.
— Sasha Ivanov 🌊 (1 ➝ 2) (@sasha35625) April 3, 2022
I hope I caught your attention. Follow me.
On April 3, Ivanov promoted a governance proposal 'to prevent price manipulation' by limiting yield returns and lowering the point at which leveraged trades - which require borrowed capital - can be liquidated when a price drop leaves someone without enough collateral.
In short, the proposal would make it more difficult to short WAVES and all but force those betting against the coin to buy or sell.