2022-5-31 21:14 |
After plunging for two consecutive months following the ongoing recession and recent stablecoin debacle started by the TerraUSD (UST) meltdown that has taken the entire crypto market down with it, the WAVES token has today started showing comeback signs.
Just like Terra (LUNA), whose price was reduced to less than $0.0001 due to the de-pegging of its stablecoin, the price of the WAVES token has also been reduced from a double-digit figure (above $54) to a single-digit figure (currently about $6).
Today’s WAVES price rally is mainly seen as a result of an announcement made by the Waves team on the USDN Revival Plan.
At the time of writing, WAVES was trading at $6.22, up 43.80% after bouncing back from a daily low of $4.31.
What caused WAVES to Crash?Waves Tech, the development team behind Waves blockchain and also the operator of the WAVES token, has come up with a revival plan after a massive selling-off of the USDN, which is the native Waves algorithmic stablecoin, in the Curve Finance liquidity pool leading to the de-pegging of the stablecoin from the US dollar at the start of last April.
In addition, there was also a liquidity crisis at a Waves-based lending protocol, Vires Finance after lenders rushed to withdraw their positions from the protocol.
WAVES problems have also been worsened by the recent LUNA/UST crash which led to a second dollar decoupling of USDN where it is currently trading at a discount.
However, Vires has limited the withdrawals since the majority of the borrowed funds are held in debts. The lenders had to wait for the payment to have the liquidity for withdrawal.
These crises had caused the token price to experience a 56% drop in the past 30 days.
The Revival Plan by the WAVES teamIn preparation for executing the Master Plan, the team was about to completely restore the dollar-peg of USDN stablecoin in two months.
The plan had the following points:
Liquidate whales’ accounts and restore liquidity to Vires.Issue a new token to recapitalize the Neutrino Protocol.Slowly sell USDN collateral over two months.Return liquidity to the USDN pool using Curve and CRV tokens.However, today’s rally was greatly influenced by the plan of liquidating whales’ accounts and restoring liquidity to Vires.
The overextended USDN/USDC/ USDT accounts will allow liquidation of large USDN positions Without potential side effects like USDN de-peg.
The post WAVES token has jumped by over 43% after the Waves team announced a ‘Revival plan’ appeared first on Invezz.
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