USDN, or Neutrino USD which is based on the Waves blockchain ecosystem, has sent shockwaves in the stablecoin market as it has diverged dangerously from its US dollar peg. This has prompted both USDN and Waves to slip to new lows. At the time of writing this article, Neutrino USD was trading at $0.82 after losing 9.47% in the last 24-hours. And Waves is down by 22.41% in the last 24-hours, as per CoinMarketCap, and is trading at $34.81.
Last Thursday, Waves was trading up 600% in a little over a month. But now due to USDN’s instability, Waves is crashing. Analysts highlighted that most of the economic activity and total value locked in the Waves ecosystem is connected to the use of USDN. And for Neutrino protocol to issue USDN is related to the price of WAVES. The USDN is backed in kind by staked WAVES tokens. It also impacts the yield users earn on USDN in the Vires Finance dApp.
Sasha Ivanov, Waves Founder, and Lead Developer, lashed out at Alameda Research for price manipulation to profit from a short position. He tweeted that Alameda founder Sam Bankman-Fried dismissed it as a conspiracy theory. It should be noted that WAVES price plunged from a record high of $64 on March 31 to an all-time low of $47 on April 4 and declined further today. Waves have been accused of artificially pumping WAVES by 750% in the last two months. An analyst said Waves achieved this by converting the tokens to USDN, using the proceeds to purchase WAVES, redeploying USDN into the Vires Finance pool to borrow more USDC, and using USDN to borrow USDC.