On March 28, layer-1 coin WAVES was trading for under $32. By March 31, it hit an all-time high of $62.36. And just as quickly the price has headed back down to around $36, shedding 25% of its all-time mark in the last 24 hours alone.

Simultaneously, the price of Waves-based stablecoin USD Neutrino has lost its peg to the dollar, dipping today to $0.68.

Of course, price swings in crypto are common, but that's still extremely volatile for a top-40 asset. It's too up-and-down—too "wavy" to write off as just crypto being crypto.

Sure enough, there's a deeper current that appears to be driving the price flow.


Like Ethereum, Waves is a layer-1 blockchain that features smart contracts and allows people to launch their own decentralized applications and associated tokens. Akin to Terra, its most popular feature has been its own algorithmic stablecoin—USD Neutrino, which is backed by Waves. Users who stake USDN—making their own cash available for lending—get rewarded in WAVES. Crucially, the actual rate of return is dependent on the price of WAVES.

On March 31, a pseudonymous crypto markets analyst going by the name 0xHamZ tweeted a long thread in which they called the Waves platform "the biggest ponzi in crypto," using data to make that case that the stablecoin system can only be stable if there is "continuous WAVES market cap growth." Furthermore, they allege that Waves is frantically working behind the scenes to prop up the ecosystem by borrowing other stablecoins to buy its own.

Waves Platform founder Sasha Ivanov says the opposite is true—someone is working behind the scenes, but it's an effort to pull Waves down. He sees the 0xHamZ thread as part of a concerted campaign to discredit the platform, sometimes referred to as "Russian Ethereum." (Ivanov claims both Russian and Ukrainian citizenship and says the project no longer has staff in Russia.)


Ivanov claims that Alameda Research, a crypto trading firm founded by FTX CEO Sam Bankman-Fried, has been manipulating the price and attempting to tank the asset in order to make money by shorting it. Ivanov cited a March 11 Bloomberg piece that pointed to a sharp uptick of WAVES supply on FTX exchange in late February and early march.

According to Ivanov, the scheme works by borrowing massive amounts via Waves-based lending protocol Vires Finance, then selling it off while spreading "FUD" (fear, uncertainty and doubt), thereby pushing the price down. Why would they want to "short" the cryptocurrency in this way? Because they can then buy the cryptocurrency at a lower price and then repay their loan—which will be much cheaper since the asset is worth less. Thus, they stand to make a profit.

Bankman-Fried called it a "bullshit conspiracy theory." Alamada CEO Sam Trabucco responded to Ivanov's accusatory tweet on April 3, saying, "People should really look at funding rates for WAVES right now." Funding rates refer to the cost to short an asset, though Trabucco didn't indicate how those rates—negative at the time—affected the firm's strategy.

Ivanov says he won't stand pat. On April 3, he promoted a governance proposal "to prevent price manipulation" by limiting yield returns and lowering the point at which leveraged trades—which require borrowed capital—can be liquidated (i.e., taken) when a price drop leaves someone without enough collateral. In short, the proposal would make it more difficult to short WAVES and all but force those betting against the coin to buy or sell.

"Let's protect [the Waves] ecosystem from greed!" tweeted Ivanov. "GREED IS BAD."

Neither Alameda Research nor Ivanov were immediately available for comment.

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