I. Introduction:
Waves has been hailed as the Russian Ethereum since its inception. This project was crowdfunded and listed on the exchange in 2016. It raised a total of 16 million US dollars, second only to Ethereum in terms of financing amount that year. WAVES is positioned as a financial public chain, including custom currency issuance, financial transactions and settlements, and crowdfunding can all be realized on the Waves platform. USDN stablecoins can be directly purchased through Waves Exchanges. The exchange integrates centralized exchanges and decentralized exchanges. After the Russian-Ukrainian war broke out in 2022, various countries adopted various economic sanctions against Russia. At this time, WAVES can indeed meet the hedging needs of people's property. This is also part of the reason for the rise of WAVES. Putting aside the news level of speculation, the reasons behind the rise of WAVES are worth pondering.
2. Project introduction
Waves is an open source platform and decentralized environment for Web 3.0 applications, offering a variety of specially designed tools that make the process of developing and running dApps easy and accessible. Waves is synonymous with its founder, Ukrainian-born scientist Alexander Ivanov, also known as Sasha Ivanov. Before founding Waves, Ivanov was already active in the cryptocurrency space, launching the now-defunct instant exchange Coinomat and the indexing site Cooleindex. He also created an early version of CoinoUSD, a stablecoin pegged to the U.S. dollar. Ivanov actively promotes Waves publicly and is frequently interviewed about trends in the platform and the broader blockchain industry. WAVES has released many successful blockchain-based solutions and has steadily developed into a rich and growing technology platform. Ivanov's goal for Waves is very clear - to apply blockchain to financial and pan-financial fields such as securities, crowdfunding, legal currency transfers, etc., to create a financial public chain.
Nowadays, the Waves ecology not only realizes a small cycle within the ecology, but also excels in the solution of cross-chain solutions, achieving a large cycle of interaction with other public chains. The stable currency USDN it issues also supports ETH, BSC and other chains, and is currently developing market circulation.
3. Technical advantages
WAVES is positioned to be easy to use and widely used by the outside world. The network is built on the Scorex platform and will use an improved PoS consensus mechanism, Lease PoS (LPoS), which enables lightweight clients to use their balances to maintain network security, while leaving the tokens themselves to the full nodes.
This dual architecture means end users only need a lightweight client, which is easy to install. The interface is similar to existing online banking and transaction apps, making it easy for users to get started. Activate new transaction types via plugins. Other platforms will write the content of these transaction types into the core, which will lead to the emergence of hard forks. Any developer can deploy new transaction types, and any node can broadcast these transactions, regardless of whether they have plugins installed. This will form an app store ecosystem with great flexibility. "
4. Application scenarios
By introducing compliant gateways, financial institutions can issue fiat currency tokens backed by real fiat currencies on the WAVES blockchain, such as US dollars, renminbi, and euros. These tokens can be sent around the world very quickly and cheaply on the blockchain (remittance service). According to the supervision of the enterprise, KYC (Know Your Customer) supervision is implemented when legal currency funds enter and exit the blockchain. Moreover, because these fiat currency tokens are backed by real fiat currencies and are equivalent to fiat currencies under any circumstances, they avoid the risk of violent price fluctuations in cryptocurrencies such as Bitcoin and are easier for mainstream people to use.
Unlike other low-level exchanges, there are no limits on withdrawals when using Waves decentralized trading, and every cryptocurrency purchased appears instantly in its own wallet balance.
Waves also features matchers and high channel capacity, which allows traders to close trades as quickly as centralized trading, but without the risk of losing money. It also offers extremely high security since the funds are held in the wallet rather than on the exchange; fees are also kept to a minimum with only a small fixed commission per order. Waves is not only beneficial to developers, but on the other hand, you can enjoy the benefits of high network throughput, low latency and low fees, so it can issue its own blockchain tokens, let enterprises crowdfund, loyalty programs, voting, etc. One step ahead. Of course, Waves is also suitable for traders, allowing assets to be securely stored on the native Lite client while also being traded quickly and securely on the built-in decentralized exchange (DEX). Best of all, Waves partners with Deloitte. This will help facilitate the development of a legal framework for wider adoption of blockchain technology.
5. WAVES’s Ponzi scheme
DeFi researcher 0 xHamZ posted his thoughts on Waves on his personal social media platform:
1. Waves borrows USDC and USDT stablecoins at an annualized interest rate of 105.48% (35% three days ago), and then uses them to purchase its own Waves tokens, thereby boosting its currency price.
2. By staking Waves tokens, Waves can mint more USDN native stablecoins;
3. By mortgaging the USDN native stablecoin, Waves can borrow more USDC and USDT stablecoins from users;
4. In order to maintain system stability, the market value of WAVES needs to continue to grow, so the key is to attract more people to deposit USDC and USDT stable coins into its lending platform;
5. When it is unable to attract enough USDC and USDT stablecoin deposits, WAVES tokens will lose their buying source and therefore will fall into a negative cycle. When the market value of WAVES is lower than the outstanding debt of USDN, USDN will face the risk of de-anchoring. risk.
Simply put, the WAVES team’s operation process:
It also allows lending and borrowing of USDC/USDT. The current APY rate for USDC/USDT supply on the Vires platform is 105.48%, which is currently higher than any other yield protocol. In the picture below we can see that USDT/USDC has been completely borrowed.
WAVES is a layer 1 blockchain, and its primary use right now is to mint USDN, the native stablecoin of the WAVES blockchain.
You can compare WAVES to LUNA/MKR, while USDN corresponds to UST/DAI.
WAVES needs to expand its market cap so it can issue more USDN. The health of the ecosystem is defined as WAVES market cap/USDN. Due to the skyrocketing price, WAVES created more USDN issuance capacity.
USDN is supported by WAVES, and as more USDN is issued, the yield of USDN will decrease. In order for the entire project to operate smoothly and healthily, the market value of WAVES needs to maintain continuous growth. When yields are low, there is a risk of capital flight.
For the game to continue, WAVES must attract users to deposit USDC and USDT into the VIRES protocol so that they can borrow these stablecoins through newly minted USDN. This naturally requires them to offer above-market interest rates to incentivize people to deposit USDC and USDT into the VIRES protocol.
There is a supply of 100 million WAVES tokens (unlimited issuance), 85% of which are in a pledged state, which makes the circulating WAVES only 16 million, plus some holders will not sell and other reasons, we can assume that 10.5 million WAVES are Tradeable, when only 10.5% of the tokens are available for trading, then the market becomes easy to manipulate.
The issuance of USDN will eventually stop, and once the target is reached, there will be no plans to buy WAVES anymore, and the entire cycle will die quickly.
If the price of WAVES drops to a sufficient level, the market value of WAVES may be lower than the outstanding USDN, which means that USDN will become insolvent and decoupled. If USDN decoupling really occurs, then users who deposit USDC will Facing huge losses, this would be a disaster.
Everything was funded with borrowed money and the Ponzi scheme is still going on.
Summarize
There are many opportunities in the encryption market, and new things appear every day. What we need to do is to keep learning. Your knowledge determines how far you can go.