Sasha Ivanov said that cryptocurrencies need regulation to deal with market manipulation and protect users.
Sasha Ivanov, founder, and CEO of smart contract Blockchain Waves, said the cryptocurrency industry needs regulation to address market manipulation issues and protect users against malicious actors.
In an interview with BeInCrypto, Ivanov also discussed the “six whale accounts” that had outsized loan positions they couldn’t repay, risking USDN’s parity against the dollar, and how he stepped in with $500 million of his own money to “save the day”
But the stablecoin has remained unstable, falling to around $0.90 on August 28. The Neutrino Dollar, or USDN, is an algorithmic stablecoin native to the Waves ecosystem.
Here is a summary of the major interview highlights:
BeInCrypto: How did you manage to restore USDN parity, which fell to $0.80 in April?
We understand that he took on $500 million worth of personal debt to defend parity. How exactly did that work?
Sasha Ivanov: Yes, the problems first occurred in April when six whale accounts borrowed the vast majority of Vires Finance’s liquidity and the crypto market in general crashed.
In addition to subsuming bad debt and preventing future divestitures, we have also introduced new incentives to support USDN through the Smart Utility Recapitalization Feature (SURF).
Furthermore, we have implemented a new system of dynamic loan and withdrawal limits to ensure that Vires Finance can continue to operate even in extreme crypto market conditions.
BeInCrypto: You had a public dispute with Sam Bankman-Fried over allegations of WAVES price manipulation.
How was that situation resolved?
Sasha Ivanov: Our resolution is regulation, which is on its way. In the meantime, we have been working on our own solutions, such as the upcoming release of PowerDAO to help us regulate our own ecosystem.
By doing so, our users will be safe. We are still working out the details of how it will work, but it will be totally unique for the Waves community to have a DAO created to protect their interests.
PowerDAO will have a new governance method that will reward actions and decisions that support the community and penalize actions and decisions that harm it. It is a new design for decentralized governance and we hope that it will be adopted throughout the cryptocurrency sector.
BeInCrypto: Stablecoins like USDC have become major talking points following the recent Tornado Cash sanction.
How does USDN engage with regulators when it comes to sanctioning, versus user privacy issues?
Sasha Ivanov: While this may not be the most popular opinion, I think we need regulation to protect users. As such, we are all in favor of finding some real and efficient solutions through smart conversations with regulators.
We are happy to talk to regulators at any time about how to do this sensibly and with respect for the values of the people in the space.
BeInCrypto: What is the risk that USDN could see a Terra UST-style death spiral?
Sasha Ivanov: For starters, USDN is built completely differently than UST; otherwise, we would have already suffered the same fate.
A feature of our revival plan is the ability to dynamically limit withdrawals and loans if the platform becomes overused. For example, when more than 95% of funds are used, withdrawals will be limited to $1,000 per day per account.
This limit will be automatically reduced as the use of funds decreases. When it falls below 80%, all withdrawal limits will be lifted until those thresholds are reached again. This means that USDN will not collapse even in the worst case in the future.
By Audy Castaneda
