Waves Founder Requests, Exchanges Stop Futures Trading For Native Tokens
Sasha Ivanov, the inventor of the Waves blockchain, has urged centralized exchanges to ban the ability for traders to short Waves, the protocol’s native currency, following a 40% decrease in its price over the past week.
Ivanov requested that exchanges, including Binance, Kraken, and KuCoin, deactivate the waves token futures market.
“Waves does not need waves [token] futures markets,” Ivanov tweeted, adding, “They are a breeding ground for FUD and making money off short positions, profitable because of it.” FUD refers to a broad sense of pessimism about a coin or the market, which can result in a downward price movement.
The waves token has experienced a precipitous decrease in value over the past two weeks. During this time frame, CoinGecko data indicates a 40% decline in value from $2.37 to $1.54.
Waves Labs announced on Monday that a supposedly deceptive DAXA warning on the market health of wave is to blame for the current lower price movement. DAXA is a South Korean collective of digital assets. Upbit and other major South Korean exchanges responded to the warning by suspending waves of token deposits.
According to the article, this warning came amid rising short interest in the waves token. As a result, the research said, the liquidity constraint caused by the suspension of deposits fostered the ideal atmosphere for short sellers to generate huge profits.
New Waves Stablecoin
The waves token is one of many tokens in the protocol’s ecosystem that is declining. Neutrino dollar (USDN), the Waves ecosystem algorithmic stablecoin, has likewise lost a large chunk of its peg to the U.S. dollar. The USDN exchange rate is now $0.51 as of publication.
Following the DAXA alert, the USDN lost its peg just as waves began to drop. The stablecoin is pegged to the U.S. dollar and is backed by waves token. Users mint USDN by staking their waves token in the Neutrino system.
Ivanov has said he would introduce a new stablecoin. He indicated that the protocol would devise a solution to the USDN predicament but did not give any other information.
It’s just time to create a protocol more attuned to the current market conditions,” said Ivanov, adding, “It will be easier to stabilize USDN first and launch the new protocol after.”
The USDN is not unfamiliar with losing its peg. Earlier in the year, the algorithmic stablecoin lost parity with the U.S. dollar due to a dispute between Waves and the bankrupt crypto trading firm Alameda Research. The conflict caused a liquidity crisis on the Waves-based DeFi protocol Vired Finance, which had to be rectified later in the year.
