It’s been a tough year for algorithmic stablecoins. Historically, these cryptocurrency tokens have failed to maintain their hold on one dollar, especially under heavy selling pressure. But Terra’s collapse was catastrophic, and the cascading effects had a decisive impact on the rest of the market.
Seven months later, another algorithmic stablecoin is having trouble maintaining its coin’s peg to the dollar. In fact, this is the fifth time that the wave-supported neutrino (USDN), which is currently trading at $0.84, has been decoupled from the dollar. South Korean exchanges issued a warning that this affected the Waves token, which has come under scanner for apparent fluctuations in its value.
R & D title waves
In the latest post, Waves claimed that USDN is a separate project that uses WAVES as collateral and is not “intrinsically” tied to the original token.
“USDN is a separate project built on the Waves blockchain that uses WAVES as collateral; it was not originally pegged to the WAVES token. There is only one way that USDN can directly influence the price of WAVES – by redeeming WAVES from the contract and selling WAVES on the market.”
It all started when the Digital Asset Exchange Association (DAXA), which consists of five major crypto exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) in South Korea, warned users against investing in WAVES citing the high volatility caused by the USDN disruption. comment.
DAXA – Upbit – announced that the platform is considering closing the WAVES/KRW and WAVES/BTC pairs, adding that it will monitor the token for the next two-week period to determine its next course of action.
Waves revealed that it had cooperated with the investigation to mitigate a “serious and patently harmful misunderstanding” of the relationship between WAVES and USDN. The team behind the open source platform also said that they are very confident of finding a solution during the two-week investigation period.
DAXA is targeting yet another token
The collapse of Terra and the subsequent downfall of FTX prompted South Korean regulators to tread carefully. In line with the lawsuit, the Seoul Central District Court decided to justify DAXA’s decision to remove Wemade’s Wemix (WEMIX) tokens from the country’s major crypto exchanges.
According to court documents, DAXA accused Wemede, which is backed by tech giant Microsoft, of not disclosing the number of outstanding tokens. The game developer has dismissed the allegations and said it will continue its legal battle against cryptocurrency exchanges.
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