Wednesday 17 August 2022
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Waves community backs DeFi revival plan for Vires.Finance

The Waves (WAVES) community has supported a governance proposal to revive the decentralized finance (DeFi) lending protocol Vires.Finance after its liquidity crisis. The vote aims to stabilize the project and compensate the users who were affected.

In April, Neutrino (USDN), a stablecoin running on the Waves platform, depegged from the dollar. This led to a series of user withdrawals within the platform, eventually ending in a liquidity shortage where users became unable to withdraw their funds from the platform. During the event, Waves founder Sasha Ivanov stepped in, accumulating $500 million in debt into his wallet with the intent to gradually pay it out.

To fix the situation, the Vires team submitted a proposal that gives two options to users who have balances above $250,000 on the platform. The first option is to exchange their positions for USDN, with a one-year vesting period and a 5% liquidation bonus. The second option is to remain in USD Coin (USDC) and Tether (USDT) with 0% APY, which will be repaid by Ivanov, without any guarantees on the time frame for the payments.

With the proposal in effect, the Vires team expects to have better liquidity, allowing users to withdraw their funds from the platform. In the announcement sent to Cointelegraph, Ivanov thanked the Waves community for supporting the proposal, highlighting that the community always has the last word on their platform.

Related: These are the least 'stable' stablecoins not named TerraUSD

Following the fall of Terra's stablecoin Terra Classic USD (USTC), some stablecoins showed signs of falling off from their dollar pegs, bringing fear to the crypto market. One of these is DEI, which is Deus Finance’s stablecoin. In May, DEI fell from its dollar peg to $0.60. At the time of writing, the stablecoin trades at $0.17.

Apart from DEI, stablecoin protocol USDD's price also showed signs of weakness in June, depegging to $0.97. However, the Tron DAO Reserved mobilized 700 million USDC to defend its peg. Right now, the stablecoin is maintaining its peg hovering from $0.99 to $1.

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About Jude Savage

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