It introduces the origin, market, and main ecological applications of Waves, and focuses on the design of the stable currency USDN.
Many people associate the Russian-Ukrainian war with the rise in the price of Waves tokens. Apart from the hype at the news level, from the perspective of product function analysis, the current Waves can indeed meet the needs of people’s property hedging, and can meet the experience of different needs. .
The price of Waves soared during the Russian-Ukrainian war
The reasons are as follows:
- Waves has its own exchange. Through Waves Exchanges, you can directly purchase USDN stablecoins. The exchange integrates the functions of centralized exchanges and decentralized exchanges to meet the needs of people to directly purchase USDN with legal currency and have good transactions. experience.
- The stable currency system of Waves is relatively perfect in design. The introduction of NSBT has solved the problem of insufficient USDN reserves to a great extent, and further ensured the stability of USDN. When the SWIFT international settlement system or other payment infrastructure is closed, USDN can play the role of fiat currency value transfer.
- Waves owns DeFo (Decentralized Forex). Different countries can exchange USDN with various algorithmic stablecoins such as EURN, RUBN, CNYN, JPYN, UAHN, NGNN, BRLN, GBPN, TRYN, etc. through DeFo tools, meeting the needs of various stable asset transfers.
- In addition to property transfer, the ecological construction of the Waves public chain is also very complete, including the secondary market, loan savings, NFT, games and other projects, and developers rely on the Waves development tools to build more usage scenarios, satisfying people’s desire for financial services and entertainment needs.
- Some time ago, the exchange froze the assets of the Russian account, and the probability of such a thing happening on Waves is extremely small. WavesEnterprise, an enterprise-level service platform of Waves, has been cooperating with many Russian industrial asset companies for many years. The business involves enterprise-level and government-level business, ranging from the transfer of industrial assets to the recording of office properties. The ability to undertake this kind of business is currently Only WavesEnterprise has a blockchain platform. For a service enterprise-level blockchain platform, Waves will not easily do things that make enterprise and government customers panic.
WavesEnterprise Partial List of Russian Clients
In addition to serving large enterprises like Microsoft through private chain technology, Waves is also relatively complete in the ecological construction of the public chain, and has developed a variety of DeFi, NFT, game wallets and other applications for the general public.
Therefore, it is logical to choose a public chain for property hedging. Although the concept of new public chains is emerging one after another at this stage, Waves is one of the few financial public chain projects that has been tested for many years.
Waves was founded in 2016 by Ukrainian scientist Sasha Ivanov.
Ivanov majored in theoretical physics for 7 years in college, and worked in artificial intelligence for 7 years after graduation. In his spare time, he has been active in the network community dominated by scientists. Later, the blockchain community became more and more active. Ivanov got caught up in it, and then decided to develop enterprise-grade blockchain applications.
Ivanov, founder of Waves
Ivanov’s goal for Waves is very clear – to apply blockchain to financial and pan-financial fields such as securities, crowdfunding, and fiat currency transfers, so as to create a financial public chain.
Today, the Waves ecosystem not only realizes the small cycle within the ecosystem, but also excels in the solution of cross-chain solutions. It has achieved a large cycle of interaction with other public chains. The stable currency USDN issued by it also supports ETH, BSC and other chains. market circulation.
market cap and price
Waves conducted an ICO in 2016 in the form of receiving donations of bitcoins, raising 30,000 bitcoins (about 16 million US dollars), and it became the third largest blockchain crowdfunding project after The DAO and Ethereum at that time.
As of March 17, 2022, according to coinmarketcap.com data, Waves has a market value of $3,422,333,753.19, ranking 45th in total market value, and is currently the largest public chain project in Russia.
Waves market value trend
Waves price action
Waves coin price reached an all-time high of $41.86 in May 2021,
In the recent trend, Waves experienced a 10-week decline in October 2021, from $32.44 to $8.02. In the case of the overall market decline on February 21, 2022, Waves began to rebound strongly, rising sharply for three consecutive weeks, from $8.2 It rose to $32.93, an increase of 300%, and is now near the historical pressure level of 32-34.
Stablecoin USD-Neutrino (USDN)
Market capitalization and distribution
USDN ranks 8th in terms of market value in the stablecoin category. Compared with Terra USD, which is also an algorithmic stablecoin and also has its own ecology, it has only half of its market value.
Almost all USDN on the ETH chain and BSC chain is used to provide liquidity in the Curve protocol, and the amount of USDN held by the ETH chain is much higher than that of BSC.
(Note: Ellipsis.finance is an authorized fork of Curve.fi, providing Curve’s StableSwap protocol for users on the BNB chain.)
Comparison of the first USDN amount in ETH and BSC wallets
Stablecoin System Design
Currently, the most popular stablecoins in the market are USDT, USDC, etc. The biggest problem with them is that they rely on real-world physical funds as reserves, which is still not decentralized enough. The Neutrino protocol is primarily designed around this.
First of all, Neutrino does not use fiat currency as a reserve like Tether’s USDT, but adopts an algorithmic stable currency protocol and uses on-chain assets as collateral as a reserve. The current main collateral asset is Waves. Secondly, the principle of Neutrino to solve the shortage of reserves is still “automatic adjustment by using the market’s profitability”, but unlike Terra’s UST, Neutrino has increased the “secondary marketization of reserves” by issuing NSBT.
This stablecoin system consists of Waves, USDN and NSBT:
The core token of the Waves ecosystem, used to pay transaction fees. It is based on the consensus mechanism of lPoS (Proof of Lease Stake) and can act as collateral for USDN in the Neutrino system.
Algorithmic stablecoins pegged to the U.S. dollar that can be used as collateral for other assets.
The maximum supply of USDN is determined by the maximum capitalization of Waves tokens.
USDN is not pre-allocated or pre-mined. The increase and decrease of USDN supply is also controlled by the market.
Neutrino’s governance token, generated through smart contracts, whose parameters depend on the USDN reserve deficit value, can be used to maintain the stability of USDN. The market price of NSBT is determined by the supply and demand dynamics of cryptocurrency exchanges and the Neutrino smart contract.
In addition to acting as a stable intermediary between Waves-USDN, NSBT tokens can also be used as payment for protocol operations, creating collateralized positions (generating USDN against Waves) and paying fees to form “hedge funds” to generate new types of synthetic assets such as GLDN (gold), EURN (euro), etc.
Waves Token Architecture Diagram
How USDN maintains stability
- Balanced state
The generation of USDN is automatically realized through the smart contract system. When a certain value of Waves tokens is locked in the account of the smart contract, USDN of the same value can be minted. Ideally, when the market capitalization of USDN and locked assets are equal, the market capitalization is balanced.
- Arbitrage mechanism
When the market demand for USDN increases, the price of USDN will be higher than 1 USD. At this time, traders can exchange Waves tokens for USDN through the Neutrino protocol, and then sell USDN at a higher price on the exchange to make a profit. Such arbitrage will increase the supply of USDN in the market to maintain the price back to $1.
On the contrary, the supply of USDN on the exchange will increase significantly, which will cause the price of USDN to fall below $1. Traders can buy USDN in the market, exchange it for Waves through the Neutrino protocol, and sell it for profit.
This is similar to the arbitrage mechanism of Terra UST. The difference is that the Neutrino protocol also uses the method of issuing NSBT to solve the problem of price fluctuations of reserve assets.
How to solve the impact of reserve asset price fluctuations on USDN
When the price of Waves rose, the market capitalization of the reserve asset Waves began to exceed the market capitalization of the USDN stablecoin. In this case, the smart contract detects excess reserves and generates a corresponding amount of USDN to buy back NSBT to increase the supply of USDN.
When the price of Waves falls, the reserve asset will be lower than the value corresponding to USDN. In this case, the smart contract detects insufficient reserves, which can be eliminated through an auction where NSBTs are generated and requested to be purchased with Waves (NSBT/Waves trading pair).
In order to facilitate the understanding of the operating mechanism of NSBT, let’s take an example:
Assuming USDN is currently worth $1 million, the price of Waves as a reserve falls by 10%.
This leaves the Neutrino protocol with only $900,000 in reserves to pay for USDN.
To fill this $100,000 vacancy, the smart contract will issue NSBT. How many NSBTs are issued will depend on the order book and their discounts from traders.
Suppose only one trader placed an order with a suggested discount of 20% at this time. This means that paying the equivalent of $100,000 in Waves will get you $125,000 in NSBT.
When the Waves price rises again, traders will be able to liquidate NSBT at $125,000 or more via pending orders. This way the trader’s profit will be $25,000 or more. In the process, arbitrageurs made a profit, and the Neutrino protocol filled the $100,000 reserve vacancy.
The impact of USDN on reserve asset prices
When USDN begins to circulate in the market gradually, this mechanism of Neutrino will in turn start to affect the tokens used as reserves (in the case of Waves).
The size of the Waves reserve determines the amount of USDN issued. In turn, when the supply of USDN is in short supply, due to the adjustment of the market and the Neutrino mechanism, the number of Waves as a reserve will increase, the circulating supply of Waves in the market will decrease, and there will be deflation in Waves. , resulting in an increase in the price of Waves.
It is worth mentioning that the Neutrino protocol is not only suitable for Waves, but can also provide a deflation mechanism for DeFi-oriented blockchain platforms such as Ethereum, EOS, and Cosmos.
- Lossless transaction
In traditional token conversion, the exchange of Waves to USD and then to Waves will cause a certain price drop. Unlike other third-party exchanges, the smart contract of Waves’ own ecology can avoid the transaction due to low spread or liquidity. The resulting price changes can guarantee that the conversion from Waves to USDN will not cause any loss of value to Waves.
Risks and hidden dangers and solutions
Some of the identified risks and corresponding risk resolution plans are listed below:
Risk Description Resolution
Hackers maliciously attack smart contract infrastructure In the early stages, there may be vulnerabilities in deployed smart contracts that allow hackers to break into and steal system information.
In the worst case, all the tokens reserved in the smart contract are stolen without any chance of recovery. Establish an emergency shutdown mechanism to allow USDN and NSBT users to retrieve their assets. Anomaly detection tools can be written in the RIDE programming language. The RIDE of the Waves ecosystem allows direct migration of smart contracts.
A black swan event for reserve token prices Scenarios in which the price of Waves falls sharply The Neutrino smart contract will issue NSBT to make up for the lack of reserve funds. At the same time, the emergency oracle can unilaterally trigger the emergency shutdown of smart contract operations.
Pricing errors and DDoS attacks specifically refer to incorrect price feedback from oracles. The value of Neutrino has experienced abnormal market dynamics for a long period of time. Neutrino dilution cannot bring sufficient liquidity and stability to the market at the same time. Neutrino states and transitions can be modeled and simulated with different parameters for these models to determine different parameters, limits and threshold levels for various operations within the smart contract
Waves balances the market value of USDN and reserves by introducing NSBT, thereby solving the problem of insufficient reserves, and expanding our ideas in the design of algorithmic stablecoins. Although Waves has its own security protection mechanism, it still faces the above risks.
The market value of USDN lags behind UST, which is also an algorithmic stable currency, not only because the market value of USDN is closely related to the market value of Waves, and the market value cap of Waves determines the issuance cap of USDN, but also because of the application scenario and narrative, similar to Terra’s UST. , when the application of the Waves ecosystem is more extensive, the USDN narrative will be larger, and the market value of the two will spiral upward.
Waves Ecology and Main Applications
At present, the main applications of Waves include Waves enterprise service platform, Neutrino protocol, Gravity protocol and other applications in DEFI and pan-finance fields, in addition to NFT collection and game applications.
Waves Ecosystem Overview
At the same time, Waves launched its own Ride programming language and supporting developer tools for developers.
Waves Developer Components
Waves lock-in asset distribution
The number of protocols in the Waves ecosystem is far behind the top 9, but TLV has already ranked in the top 10. The main locked assets are concentrated in the ETH chain, followed by the Terra chain. (Statistics from defillama.com)
Ranking of Total Locked Assets in Public Chains
Ranking of assets locked in Waves of each chain
Waves main protocol TVL ranking
It can be seen that the assets locked in the Waves ecosystem are currently mainly distributed in Neutrino (NSBT) and Vires Finance (VIRES).
WavesEnterprise is a platform focused on providing blockchain technology services to businesses and governments.
WavesEnterprise uses a hybrid model, which means that public and private blockchains are merged in one ecosystem, combining the advantages of public and private blockchains. In this way, Waves retains the security of decentralization, data storage and privacy, while taking into account legal compliance.
Many people can’t tell the relationship between WavesEnterprise and Waves, WavesEnterprise is an independent project with a separate team, ideologically aligned with the Waves ecosystem, and can share the Waves ecosystem through the Gravity protocol. The WavesEnterprise technology used to be a fork of the Waves protocol, but the target audience is different, so the intersection of technology will disappear over time.
The application areas of WavesEnterprise blockchain service solutions include: manufacturing, retail, art, health care, oil and gas, financial technology, education, etc. Enterprises can order and choose according to their needs.
Major partners include: Alfa bank (the largest private bank in Russia), RUSAL (top ten aluminum companies in the world), X5 RETAIL GROUP (a giant Russian retail company with 16,500 retail stores), ROSNEFT (the largest telecommunications company in Russia), Rosseti (Russian State Grid), etc. In addition to this, the national electronic voting system in cooperation with the Russian government has also been launched.
Waves partners with Microsoft
Most of them are giant companies in Russia’s traditional heavy industry and communications industry, but they are not limited to Russian industries. On July 16, 2020, WavesEnterprise and Microsoft Russia signed a memorandum on joint development of enterprise blockchain in Russia, agreeing on strategic cooperation in the field of enterprise blockchain solutions and cloud technology. The list of such assets is extensive, ranging from heavy machinery to basic office equipment.
Vires Protocol is a lending protocol on the Waves blockchain. Users, wallets and dapps can participate as depositors or borrowers. Depositors provide liquidity to the market to earn passive income, while borrowers are able to obtain loans with overcollateralization.
All funds deposited in Vires.finance participate equally in interest-bearing activities. The greater the market demand for borrowed assets, the greater the rewards APY lenders receive. Users can lend and lend the following tokens: WAVES, USDN, USDT, ETH, and BTC. Not only that, Vires.finance also supports the direct cross-chain of assets, and the technology is provided by WavesExchange.
Previously, the founder of Waves tweeted that Vires.finance can provide more than 25% APY, which also reminds people of the Anchor that Terra uses 20% APY to attract users, similar to Terra’s ecology-UST-Anchor Protocol, Waves also formed The capital flow of the Waves ecosystem—USDN—Vires Protocol.
WavesExchanges is the earliest decentralized exchange application (DEX) built on the Waves chain. It not only integrates the functions of a centralized exchange, but also adopts the program of a decentralized automatic market maker (AMM). In WavesExchange, users can use the limit price trading mode commonly used by CEX, or use the AMM mechanism of DEX.
On WavesExchange, in addition to using wallets, you can also exchange cryptocurrencies, buy and sell stablecoins and earn passive income through investments. In addition, users can even issue their own cryptocurrencies with one click. It can be said that it is a powerful tool for interacting with many functions provided by the Waves protocol.
Parts of Waves Exchange
waves.exchange pledges USDN to get 12-15% income, the income is settled daily, and can be withdrawn at any time.
Keeper is the wallet tool of the Waves ecosystem. The extension is currently available for all popular browsers including: Google Chrome, Firefox, Opera and Microsoft Edge.
Waves Keeper showcase page
Users can view account assets and NFTs through WavesKeeper, transfer funds in the WavesKeeper interface, and exchange assets directly through WavesKeeper integrated with Swop.fi.
Gravity protocol is an oracle protocol under the Waves ecosystem, which is used to realize on-chain and off-chain data interaction and communication between multiple chains
(1) Real data
Gravity does not issue a native token, which provides great convenience for other applications to integrate Gravity services. If an application wants to integrate Gravity’s oracle service, they can use the protocol’s own tokens to pay, and Gravity’s nodes share the revenue. Due to the binding relationship of interests, this node will honestly provide real and effective data.
(2) Open ecology
Gravity creates a more inclusive open ecosystem that addresses scalability and stability issues. The Gravity protocol not only helps nodes provide data, but also provides asset liquidity and cross-chain exchange.
At the same time, the Gravity protocol can link any blockchain to the outside world, allowing a centralized gateway to be built on top of it to help complete the lock-up of assets and transfer the lock-up information to another blockchain network to complete the asset. cross-chain transfer.
Gravity improves the liquidity and capital efficiency of crypto assets, providing a wide variety of use cases for building various DeFi products. Ducks is a digital duck chain game that collects NFTs. All characters, items, resources and achievements in WavesDucks are represented by NFTs.
The current average monthly active users have reached 296,000, making it the main game of the Waves community, which also motivates the community to promote the Waves ecosystem together. Specific gameplay includes
(1) Battle: Fight for different farms and get tokens as rewards
(2) Growth: Cultivate ducklings and cultivate them into higher-level NFTs, which can increase the price of NFTs
(3) Breeding: Incubate NFT ducks to expand collections and earn money opportunities. Unlike most NFTs, ducks are able to generate EGG tokens that can be withdrawn or used in-game. Staking NFTs generates passive income.
(4) Guild: For each event organization, WavesDucks has set up communication communities such as telegram groups.
Waves Ducks Community Events
Swop.fi is an AMM automated market maker mechanism that allows users to instantly exchange their tokens without having to create an order or wait for a trade to execute. The Waves blockchain guarantees that every transaction can be completed in seconds, and the smart contract call fee is only 0.005. The project is open to liquidity providers: any user can replenish the mining pool and earn SWOP rewards. Current total project market value locked (TVL): $21,471,027
Users can get a portion of the transaction fee for each pool by putting liquidity into the pool, and all pools except the Waves-BTC pool have USDN or EURN as one of the trading assets. The annualized income of USDN pledge is basically 8-15%.
In addition to mining, currency exchange, and governance, Swop.fi can also be used as a project launch pad to purchase tickets based on the number of pledged SWOPs to participate in different projects.
Swop.fiIDO project details
The Waves Association is a non-profit organization dedicated to advancing Web 3.0 around the world, primarily to promote research within the Waves ecosystem, and to provide funding to support Waves technology for projects based on the Waves protocol.
Similar to the Ethereum Foundation, WavesGrants offers a grant program to support individual developers, teams and startups serving the Waves ecosystem.
Funding amounts are determined on a case-by-case basis, taking into account: technical complexity, details of proposed solutions, developer/team needs, Waves project size and importance, and other criteria.
All grants are made in the Waves system, and the grant issuance and awarding process is carried out through the DAO.
Waves Association Support Program
The Waves Association recently announced a $1 million Waves grant program for projects developed on the Waves infrastructure. As a core and binding component of WavesTech, the Waves Association provides governance and support for the entire Waves ecosystem and develops more Web3 talent for Waves.
Waves social media all have name suffix (1 ➝ 2)
Waves has formulated the specific content of the 1→2 version iteration, including:
- Support for Ethereum Virtual Machine
Make Waves more accessible to external teams by providing an infrastructure of extensive development and analysis tools.
- Open a new DAO governance model,
Additional rewards for participant rewards and the ability to have ‘skins’ in the game. Waves DAO will upgrade the old concept of futarchy, and thus will introduce a new general governance model, which is said to be applied far beyond the current blockchain technology.
- cross-chain finance
Extend Gravity as a bridge to all industry chains, creating an integrated portfolio of common bridges.
- Do more business in the US
Waves has launched a US-based company, Waves Labs, in the first quarter of 2022, headquartered in Miami, and the team is currently recruiting experienced engineering, business development and marketing leaders.
In version 2.0 Waves announced that the US is a key market driving mass adoption in 2022. And to make the main KPI is the number of products the team from the US has built on Waves.
Announcing a $150 million fund and an incubation program this spring to meet this need and continue to develop and nurture talent and market opportunities. In addition, a separate DeFi fund will be launched in Q1 2022 to invest in selected Waves-based DeFi products.
The Waves ecosystem is very large, but just like the positioning of the Waves public chain, its main products are financial and pan-financial applications.
In terms of product composition, the Waves ecosystem, from the DeFi application Swop.fi to the game Waves Ducks, is connected in series with the stable currency USDN. At the same time, it has its own Gravity oracle to realize stable currency exchange rate reading, cross-chain data interaction, and off-chain data. On-chain and other functions. In terms of product interaction, Waves Exchanges and DeFi applications are related to each other, and the ecological experience is relatively smooth.
In terms of business choices, the Waves public chain serves mass consumers, and the Waves Enterprise serves enterprises and governments, providing a variety of demand scenarios for the Waves ecosystem, which is an advantage that other public chains do not have.
From the perspective of public chains, from DEX to DEFI to stablecoins, Waves has been following up on hot technologies and has certain technical advantages. The precipitation of these technologies can bring bonuses to other ecological applications. For example, Waves has cross-chain technology accumulated for many years, so in addition to the Waves public chain, USDN and NSBT tokens can also be used in ecosystems such as Ethereum and Binance Smart Chain.
On stablecoins, the USDN algorithm mechanism design with Neutrino protocol bonus is relatively complete, but the current market value ranking of USDN needs to be improved. As mentioned above, the impact of USDN on Waves is mutual, when the application of the Waves ecosystem is more extensive , When the stablecoin narrative is larger, the layout of USDN will attract more capital to Waves, and people will have a stronger consensus on USDN and Waves.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/one-article-to-understand-the-strong-rise-of-the-old-public-chain-waves/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.