Apr 12, 2022
Waves celebrate community engagement in Vires Finance DAO governance vote
- Waves Community voted AGAINST the governance proposal to limit borrowing on the Vires Finance platform.
- The proposal was created to restrict coordinated market manipulation of Waves price.
- The community expressed concerns that limiting borrowing would be too damaging long-term for the platform.
- Therefore community chose to respect the long-term values of decentralization and free markets over short-term price protection.
Vires Finance, a lending platform based on the Waves blockchain, announces that a DAO governance proposal has been rejected by the community. The proposal was created to limit WAVES token borrowing on the platform, after evidence was found of attempted market manipulation.
The goal of all Vires Finance proposals is always to make the system more robust, enabling continuous operation and reducing the risk of liquidity problems. However, due to the nature of this proposal seemingly limiting free-market principles, the community felt that the long-term effects would be too severe and has chosen to vote against the proposal.
Waves founder, Sasha Ivanov said of the vote result “We thank the community for their passionate participation in this difficult situation. We intended to give an option to protect the WAVES price in the short term, by limiting market manipulators. It’s clear now, that preserving the values of decentralization and free markets is more important. I really respect the communities commitment to these values and their wisdom in the face of a hostile market.”
In order to improve liquidity in Vires and mitigate these liquidity squeeze situations from occurring again. The Vires team will be preparing a roadmap for approval by the DAO. This roadmap will include the introduction of a maximum funds utilization rate, which will limit borrowing above a certain amount that is unsustainable or dangerous for the community. Lowering the liquidation threshold for borrowing certain assets will mean accounts will have to be kept in good health, requiring more liquidity in the platform. Restricting bot activity above a certain liquidity utilization threshold can also mitigate temporary imbalances in liquidity from occurring.
Waves is committed to protecting its community as well as sustaining the values it was founded on, decentralization, and free-market principles. All proposals should be considered based on these values and understood to be potential fixes to bad situations. Waves respects its community and their collective wisdom, without which, it would be impossible to evolve and grow the ecosystem.
