Waves team accused of dumping its stablecoin to stay afloat

Blockchain data suggests that the Waves team may have sold its own stablecoin, USDN, to top-up the bridge of its DEX and also buy back the debt accumulated by its Vires lending platform.

A crypto analyst posted on Twitter alleging the Waves team sold up to $138 million in USDN since April last year, after the Vires platform experienced a liquidity crunch.

Ever since USDN depegged in April, the Vires lending protocol suffered an alleged “liquidity crisis” which led to the loss of up to $500 million in users’ funds that were lent on the Vires protocol.  The crypto analyst told Protos that sales of USDN to top up the Waves DEX bridge slowed down as the USDN price crashed.

The claims come after Waves DEX users were unable to withdraw USDT or USDC from the exchange. The Waves DEX Ethereum bridge revealed it was depleted of all its USDC and USDT — worth $31.5 million and $58 million respectively. At the time, Protos was unable to confirm if the Waves DEX was using Binance to store and trade the crypto deposited on it.

However, on-chain activity shows the Waves team dumped USDN in exchange for Waves and then sold the Waves on Binance for USDT, which is used to top-up the DEX.

Read more: Bitcoin briefly trades above $24k on Waves DEX as users jump ship

USDN was changed into an alt coin called XTN after its founder, Sasha Ivanov, claimed to have ‘moved on’ from the project. Investors who had lent funds on the Vires protocol were asked by the Waves team to change their funds into USDN, bringing widespread consternation. 

XTN is down 80% in the past three months, from $0.93 in December to $0.19 at press time. Ivanov and the Waves team did not immediately respond for comment. We’ll update this piece should we hear back.

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