Decentralized application (DApp) creation platform Waves token (wave) has plunged as its algorithmic stablecoin backing failed to maintain its peg to the US dollar.
Starting at $2.38 on Dec. 1, Waves is currently trading at $1.75, down nearly 27%.
low-cap Ethereum (ethereum) Rivals are suffering huge losses after the Digital Asset Exchange Alliance (DAXA) flagged the token with an investment warning. South Korea’s Cryptocurrency Exchange Association cites WAVES as collateral for stablecoin Neutrino USD (USDN) lost its $1 peg and is now worth $0.565.
Following DAXA’s warning, two of South Korea’s major cryptocurrency exchanges, Upbit and Bithumb, have removed Waves from their platforms.
wave To tell There is some misconception about the relationship with USDN. In a statement, the platform said that depegged stablecoins are not inherently linked to WAVES.USDN is just another project built on the blockchain that uses tokens as collateral. I explain that it does not.
“The only way USDN can directly affect the price of WAVES is by redeeming WAVES from contracts and selling WAVES on the market.
- Only 4.2% of WAVES’ total supply is held in Neutrino Smart Contracts, representing just 9.8% of daily trading volume across all exchanges.
- USDN is not involved in issuing WAVES and cannot inflate the supply of WAVES.
- Due to the daily swap limit and backing rate protection set in Neutrino, it is impossible to deplete all reserves. “
Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should exercise caution before making risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that your money transfers and transactions are made at your own risk and you are responsible for any losses you may incur. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Quardia/Sensvector