Neutrino USD (USDN) Depegs From $1 Amid Controversy
- The Neutrino USD stablecoin has depegged from its $1 value amid market manipulation controversy.
- Founder Sasha Ivanov accuses Alameda Research of market manipulation and FUD.
- Some users are saying that they are unable to withdraw USDC and USDT from Waves’ Vires platform.
The Neutrino USD (USDN) has depegged steeply from its $1 price point over the past few days. The algorithmic stablecoin, created on the Neutrino protocol, is an asset that is pegged to the WAVES token.
USDN is algorithmically issued via smart contracts. It provides WAVES tokens as collateral in a 1:1 ratio against the U.S. dollar. The effects of the depegging have also led to liquidation issues with respect to USDC and USDT on Waves’ DeFi platform Vires.
The exact reason for this drop in value is not so cut and dry, though WAVES founder Sasha Ivanov suggested that price manipulation to trigger panic selling was the reason behind it, as people are shorting. A new DAO proposal has even been created, which, if passed, would actually reduce the liquidation threshold for WAVES and USDN borrowing to 0.1%. The maximum borrow APR would be 40% with the proposal.
Ivanov said in a tweet that Alameda Research was manipulating the price of WAVES, as well as organizing FUD, to trigger panic selling — a bold claim by any standards. He said that he noticed a lot of people “hellbent on shorting waves” after they were unhappy about the growing price.
Furthermore, he said that paid trolls were fuelling a post by an anonymous vigilante. This vigilante called WAVES,
“the biggest ponzi in crypto with recklessly engineered price spikes by borrowing USDC at 35% to buy its own token.”
He then said that WAVES would eventually crash, with USDN spurring it.
The WAVES token has so far crashed by over 13%. It may experience more difficult times as the community is not taking kindly to the DAO proposal.
Crypto Community Criticizes the DAO Proposal
The DAO proposal is now at the heart of the controversy surrounding WAVES and USDN. It would prevent borrowing USDN and WAVES on the Vires platform and cap interest rates, so it is understandable why the community would be upset. Some also accuse the Waves project of borrowing USDC to buy WAVES and pump the price, like the vigilante.
Some Vires users are also revealing that they are unable to withdraw their USDC and USDT, because of the aforementioned liquidation issues. Such incidents are not going to do Waves any favors and can only do its price harm.
This comes as Waves has been having an excellent few weeks, with the prices gaining markedly. Some investors may think that the damage has been done, but the high APR rates for USDT and USDC may attract some anyway, regardless of the risks it imposes.
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