Sasha Ivanov stated that if Waves fails, the world will lose a project truly dedicated to applying blockchain in various fields.
Written by: Sasha Ivanov
Translated by: Deep Tide TechFlow
On the evening of August 1st, Waves founder Sasha Ivanov released a personal article outlining the rise and fall of the Waves ecosystem and announced the launch of an L2 network based on the Waves blockchain. Holders of USDN (currently XTN) will be the primary beneficiaries. Additionally, Sasha Ivanov revealed that he currently does not hold any cryptocurrency, including WAVES.
The full text is as follows:
It's time to explain directly why I got involved in cryptocurrency, how I view its importance, and what has happened with Waves over the past year and a half. I have been involved in blockchain projects for nearly ten years. Initially, I was attracted by the promise of cryptocurrency to decentralize social consensus and elevate social interaction to a technological protocol level. I did recognize the value of tokenization, price discovery, and the financial aspects of cryptocurrency, but I always saw it as part of a larger vision.
However, since 2017, the development of cryptocurrency in trading and finance has far surpassed the progress in realizing real-world governance through DAO, which has proven to be an inefficient imitation. Waves began to lag behind major cryptocurrency projects around 2018, especially after the entry of venture capital into the market. Since our ICO in 2016, we have not received external investment, possibly due to our Russian background and perceived lack of "marketing." With the introduction of incentivized liquidity pools and automated market making, cryptocurrency has taken a different direction, similar to high-leverage forex trading.
Unfortunately, the lure of money is the most effective at sparking people's interest. In order to keep up with the market, Waves has imitated various features of the Ethereum project, such as on-chain pools and liquidity mining, often attempting to implement them in different ways. Despite our efforts, competing with projects supported by rich liquidity from venture capital remains challenging, as these projects provide lucrative incentives for liquidity mining.
Our stablecoin USDN was designed to address this challenge by creating a product that attracts liquidity into the ecosystem, following the Basis model, which incentivizes traders to maintain collateral levels. However, an unexpected black swan event proved that this incentive-based model has flaws.
In 2022, Waves experienced a significant amount of external market making activities, coupled with the increase in the market value of USDN and subsequent heavy shorting of $waves, leading to negative publicity and liquidity tightening in the Waves ecosystem. DeFi protocols and staking products on vires.finance and waves.exchange heavily rely on USDN. To address this issue, it became necessary to liquidate USDN and reduce its collateral in Waves, resulting in a decline in the Waves price, while striving to maintain the value of USDN around $1. This crisis also affected wrapped tokens on waves.exchange, as their staking products are supported by USDN.
Although we successfully recovered approximately 90% of the staked funds on waves.exchange through the redemption and use of our resources (all $Waves from the ICO), we were unable to keep up with the decline in Waves price. As a result, billions of dollars' worth of liquidity in the vires.finance lending protocol, supported by USDN, became trapped, losing its pegged value and essentially becoming an ecosystem index token.
As the world undergoes transformation, we are currently experiencing a very difficult period. People are facing instability and uncertainty. I do not want to exacerbate this instability and will do everything in my power to address the trapped funds, which is my top priority. At the same time, we need to drive progress by creating new products that can increase the value of the Waves ecosystem, although not necessarily attracting new liquidity. We are about to launch an L2 network based on Waves L1, where holders of USDN (XTN index) can become its primary beneficiaries. According to the proposal accepted by Waves miners, XTN itself is gradually being repurchased through Waves inflation, which means that XTN holders or Vires users who choose not to convert to the new L2 token should eventually be compensated.
When I founded Waves, I pledged not to hold any cryptocurrency other than Waves, as I considered myself a cryptocurrency anarchist, avoiding owning any property. Currently, I do not hold any Waves or other cryptocurrencies, but this is not important. I firmly believe that blockchain transcends the concept of currency and has deeper goals, not just creating "better money." If Waves fails, the world will lose a project truly dedicated to applying blockchain in various fields.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
