Support Neutrino and Earn More Rewards by Bringing your USDN Home to Waves Protocol.
Announcing the #NeutrinoComingHome campaign to incentivize and bring more utility to Waves-based USDN.
We’ve seen how vital external liquidity pools like those at Curve Finance are to stablecoins. Even fully backed stablecoins like USDT have suffered depegging due to aggressive selling of the coin in pools. That imbalance signals to the market that the stablecoin is weak and enables market opportunists to trigger significant depeg events. With large, well-capitalized institutional players now firmly present in the DeFi market, this represents a significant risk.
Neutrino’s peg is now restored for the second time in 2 months. However, the USDN 3pool is still imbalanced; if large-scale selling occurs, it could cause a third depegging. We believe there is a better way. We can reduce the effect of external pools, become much more independent, and grow better and more sustainably as an ecosystem by bringing Neutrinos home.
So today, we are calling all Neutrino holders — to come back to Waves!
Why?
- Better incentives (check Waves.Exchange liquidity pools)
- Support the stability of Neutrino
- Reduce the effect of external liquidity pools
- Improve liquidity on Waves
- Waves-based arbitrage benefits the entire ecosystem.
Here are the measures we are proposing to the community to improve stability and increase the utility of Waves-based Neutrinos:
- Temporarily stop all transfers of USDN from Waves to ETH
- Restore balance of Waves.Exchange pools through market-making
- Buy 20k WAVES worth of CRV/CVX tokens per week to incentivize USDN stability on Ethereum.
- Adjust the A Parameter on Waves.Exchange to limit pool imbalance impacting price.
- Launch marketing campaigns to bring more users to Waves.Exchange.
Read on to see detailed explanation of each point
Stop all transfers of USDN to Ethereum.
We can already hear the battle cries from the community! “Ponzi,” Scam,” and “Waves is locking you in.” We know how this sounds.
So first, let’s consider the value of this:
- We stop large buying of USDN in Waves to dump on the market through the Curve pool (aka market manipulation)
- We keep liquidity in Waves so you can use it to take advantage of the market opportunities that exist.
- With USDN back to peg now, stopping withdrawals to Ethereum means the Curve pool will remain stable… no more depeg risk from externals.
- Arbitrage on Waves is much more sustainable as there is a system of checks and balances within the Waves ecosystem that limits the amount of USDN that users can swap each day.
Importantly:
- You’ll still be able to use the gateways to move any other assets in and out of Waves.
- This is a temporary measure to restore liquidity and stability to Neutrino specifically. Neutrino will remove limits once we have good liquidity on Waves and the Curve Pools function correctly.
Restore balance to Waves.Exchange pools through market-making.
Imbalances in liquidity pools weaken the stablecoin. To restore the balance, Neutrino will buy USDN and add it to the liquidity pools. Strengthening the peg and stability of USDN and increasing the security and stability of rewards.
What’s the value:
- More liquidity in the pools means stable rewards
- Balancing the pools means stable prices
- A stronger USDN peg
Buy 20k WAVES worth of CRV/CVX tokens per week to incentivize USDN stability on Ethereum.
While we want to bring liquidity back to Waves, we know that Curve pools are critical in the stability of Neutrino. So we will use $WAVES staking profits from the Neutrino contract (see the announcement) to buy 20k WAVES worth of CRV or CVX tokens a week; this will improve Neutrino’s power over votes on Curve Finance. More control over the votes means we can protect our interests and incentivize the pools that keep USDN stable.
What’s the value:
- Incentivize the USDN liquidity pool to receive more rewards, making it more attractive.
- Gain power over the Curve governance votes to protect Waves ecosystem interests.
Adjust the A Parameters on Waves.Exchange to limit pool imbalance impacting price.
NB: Read more about A Parameter
The “A Parameter” is a part of the algorithm that determines the exchange rate of assets in liquidity pools. “A parameter”is also used in Curve, where users can vote on the A level. A low “A parameter” shows that the confidence level is low in the stablecoin and that the protocol does not support it. A high parameter indicates confidence that the stablecoin is unlikely to be depegged. As a result, a low A Parameter means it is relatively easy to depeg the asset with the opposite also being true.
For example, the MIM Pool on Curve had a high “A parameter” of 2000, and despite the pool being 99% out of balance, the price did not depeg from the USD.
What’s the value:
- Large orders within the USDN pools do not affect the exchange rate
- Stable USDN
- Stronger Peg
Launching marketing campaigns to bring more users to Waves.Exchange.
Lastly, we’ll be working on bringing more users to Waves.Exchange with user acquisition campaigns. This week, we have already announced the new Lamboway campaign. In true crypto fashion, you can win a Lamborghini by participating!
Over the next few months, keep an eye out for more activities aimed at bringing in more users.
A word for our community.
We hear your protests and understand the frustration with the situation. We also hear your issues with our level of communication, that we’re not clear enough, that we are unilaterally making decisions, and for that, we apologize.
We are trying to help the Waves Ecosystem navigate through unprecedented times. There is a need to move fast to restore full function and gain back investor confidence, so we can all benefit.
This campaign is another piece to Building Back Better! Becoming more stable, more independent as an ecosystem. But it won’t work without your support!
Share this article and use the #NeutrinoComingHome to signal that you’re with us!
Neutrino website: https://neutrino.at
Twitter: https://twitter.com/neutrino_proto
Telegram : https://t.me/neutrino_group
