The native token of the Waves (CRYPTO: WAVES) blockchain project fell by more than 23% on Tuesday.
What Happened: According to data from Benzinga Pro, WAVES fell to an intra-day low of $32.84. After rallying more than 200% in March, the token has seen a massive decline over the last week.
Data shows that WAVES — often dubbed the "Russian Ethereum (CRYPTO: ETH)" — has lost 43% of its value since hitting an all-time high of $61.30 on March 31.
The Layer 1 blockchain’s stablecoin USD Neutrino (CRYPTO: USDN) has also lost its peg to the U.S. dollar, falling to a low of $0.72 on Tuesday.
Last week, pseudonymous analyst “0xHamz” posted a thread on Twitter Inc (NYSE: NYSE:TWTR) alleging that the Waves blockchain was “the biggest ponzi scheme in crypto.”
WAVES is the biggest ponzi in cryptoIt has recklessly engineered price spikes by borrowing USDC at 35% to buy its own token
Continuous WAVES market cap growth is needed to keep the system stable
WAVES will eventually crash and USDN will break with it
You're on notice
— 0xHamZ (@0xHamz) March 31, 2022
The analyst presented a data-backed argument that suggested that the project’s stablecoin would only be sustainable so long as WAVES’s market cap saw continuous growth.
If WAVES prices drop enough ---- WAVES mkt cap could be less than USDN outstandingMeanwhile, the Waves blockchain founder Sasha Ivanov said the thread was nothing more than a campaign “fuelled by a crowd of paid trolls” to bring WAVES down.This would mean USDN is insolvent and would depeg
If USDN depegs is material --- the USDC short on Vires could liquidate $607mm of the $875mm outstanding USDN
This would be Armageddon
— 0xHamZ (@0xHamz) March 31, 2022
This campaign triggered liquidity withdrawal from https://t.co/qvDu9FIYj2, so I had to really look into what was going on. I started with Vires lending platform, because before that someone had reached out to us asking to borrow 1 mln $waves (obviously to short)— Sasha Ivanov