Waves: $USDN Uses $WAVES as Collateral, but Not Intrinsically Linked to $WAVES

Public chain project Waves responded to Upbit and Bithumb's belief that $WAVES prices could become volatile due to $USDN depeg, saying that $USDN is a separate project built on Waves blockchain that uses $WAVES as collateral; it is not intrinsically linked to $WAVES.

Waves stated that the only way $USDN can directly affect $WAVES price is by redeeming $WAVES from the contract and selling $WAVES on the market.

Currently only 4.2% of the $WAVES total supply is held in the Neutrino smart contract, equating to only 9.8% of the daily trading volume across all exchanges. $USDN plays no role in the issuance of WAVES and cannot inflate $WAVES supply. Therefore, the effect of entirely redeeming all $WAVES in the smart contract would be negligible and there is zero new issuance of $WAVES.

Previously, Upbit announced that the Waves ecosystem algorithmic stablecoin $USDN was de-pegged and its collateral asset $WAVES was flagged as an Investment Warning asset by the Digital Asset eXchange Alliance (DAXA).