Waves ecosystem revival plan introduces three measures, emphasizing the stability of USDN peg, having survived two major liquidation events.

Waves officially introduces the DeFi ecosystem revival plan, emphasizing that the algorithmic stablecoin USDN has survived two major liquidation events. The next step is to purchase CRV for bribing, aiming to strengthen the liquidity of the USDN 3-pool. The ecosystem's algorithmic stablecoin protocol, Neutrino, will also launch a capital restructuring token to further stabilize the peg of USDN.

The Rise and Fall of Waves

The public blockchain Waves (WAVES) has been on the rise since early February this year. As previously reported, the main reason for Waves' rise is attributed to its algorithmic stablecoin protocol Neutrino, which is similar to Terra's ecosystem, as well as the USDN stablecoin pegged to the US dollar.

At that time, users could earn up to 15% stablecoin rewards by pledging and locking WAVES to mint the algorithmic stablecoin USDN in the Neutrino protocol-related services.

In April, a tweet by crypto analyst 0xHamZ caused community panic, leading to a massive exchange of USDN back to WAVES. In the analysis, it was pointed out that the Waves team leveraged the lending protocol Vires.Finance to amplify funds, used to boost the price of WAVES and the TVL in the ecosystem.

In an announcement, Waves stated that despite the USDN unpegging issue, the price has recovered from "two" major redemption events, with the second referring to the LUNA/UST unpegging crisis. Currently, USDN has returned to $0.9893.

DeFi Ecosystem Revival Plan Phase One

1. Stable Pegging

Waves believes that resolving the unpegging issue is a top priority for the implementation of subsequent plans. Neutrino has changed the exchange mechanism between WAVES and USDN, where users previously needed to pledge a large amount of NSBT to exchange or redeem the corresponding amount of USDN and WAVES.

The required NSBT amount for users to pledge has been reduced, with the belief that this will stabilize the pegging through increased redemption capacity.

2. Maximum Daily Withdrawal of $1,000 for USDT, USDC

This is to prevent immediate liquidity fragmentation by bots after repayment, limiting bot activities so that regular users can withdraw at least $1,000 per day.

3. "VeToken" Model

Vires.Finance proposed a token model similar to "VeToken," with lock-up periods of 3, 6, and 12 months. Users opting for longer lock-up periods will receive higher VIRES token rewards.

Phase Two

1. Strengthening USDN 3-Pool Incentives

Utilizing 45% of the yield from WAVES pledged in Neutrino to purchase and lock CRV tokens, and staking the voting rights in the USDN liquidity pool to obtain more CRV rewards, aiming to bring more liquidity to the pool.

2. Liquidating Large Holders

Waves founder Sasha Ivanov will propose intervention in the $400 million debt of large borrowers in Vires Finance, aiming to liquidate their collateral without affecting the USDN peg, reinjecting liquidity into Vires to reduce utilization and increase user withdrawal limits.

3. Neutrino Introduces Recap Token for Capital Restructuring

Users can arbitrage in two ways. Firstly, when the Backing Ratio (BR) is 0.5, users can exchange governance tokens NSBT or WAVES for Recap tokens at a discount, which can be redeemed for $1 worth of WAVES tokens once the BR returns to >1. Secondly, Recap token holders will receive additional rewards for WAVES pledged in Neutrino. It is expected that NSBT will devalue and be replaced by Recap tokens.

As of now, WAVES is ranked 59 in market capitalization, with a 62% increase in the last 24 hours, and a 27% increase in TVL in the last 24 hours, ranking 10.

The official statement emphasizes that despite the significant crisis in the Waves ecosystem, all functions will be restored and made more sustainable to better prepare for future attacks.