Sasha Ivanov, founder and CEO of the Waves smart contract blockchain, said the crypto industry needs regulation to deal with issues of market manipulation and to protect users against bad actors.
In an interview with Be[In]Crypto, Ivanov also spoke about the “six whale accounts” that had outsized loan positions they could not repay, risking USDN’s dollar peg, and how he stepped in with $500 million of his own money to save the day.
But the stablecoin has remained shaky, falling to about $0.90 on Aug. 28. Neutrino dollar, or USDN, is an algorithmic stablecoin native to the Waves ecosystem.
Below is an excerpt of the interview.
How did you manage to restore USDN’s peg, which dropped to $0.80 in April? We understand you took on $500 million worth of personal debt to defend the peg. How did that work exactly?
Yes, the issues first occurred in April when six whale accounts borrowed the vast majority of Vires Finance’s liquidity and the overall crypto market crashed. Since the price of WAVES was falling quite fast — just like every other crypto at the time — the six overleveraged whales could not repay their loans as the amount of interest they owed continued to grow. This is when I had to step in to take roughly $500 million worth of this bad debt into my own wallet to gradually repay it. Not doing so would have allowed those accounts to be liquidated, creating more selling pressure due to the quantity of USDN sold.
That selling pressure in turn would have massively increased the risk of depegging. Since then, we have collaborated with the Waves community to take a number of steps — all approved by majority consensus via decentralized voting — to prevent this situation from happening again. Apart from subsuming the bad debt and preventing future depegs,
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