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Neutrino Dollar falls below 1 US dollar: allegations against WAVES for price manipulation

 


Neutrino Dollar (USDN) is a stablecoin issued via the Waves-funded Neutrino protocol. On April 4, it dropped below $1, losing its peg. It is now speculated that the coin could be "bankrupt".


USDN collapses 15 percent despite support from WAVES

USDN fell to a low of $0.822 on April 4th. Market cap also fell to $824.25 million, down 14 percent from the year-to-date high of $960.25 million.


The stablecoin has tumbled despite Neutrino's claims that it can maintain its peg to the US dollar via so-called "overcollateral". Over-security means that the total value of Waves ( WAVES ) tokens locked in the smart contract is higher than the total USDN minted.



Price development for Neutrino Dollar in the last 24 hours. Source: CoinMarketCap

The coverage ratio of the Neutrino smart contract was 2.62 as of April 4, according to official data . This shows that it has sufficient funds to maintain its peg to the US dollar. And that despite WAVES falling over 35 percent in the last five days.


Course manipulation

WAVES fell from its record high of $64 on March 31st to as low as $47 on April 4th. The coin gradually fell as the RSI surged above 70. This put the coin in the "overbought" zone that usually triggers a selling sentiment.



WAVES/USD daily rate chart. Source: TradingView

Then there were these sales. One analyst accused Waves of artificially inflating the coin by 750 percent over the past two months. The following should have happened:


1) USDN is used as collateral to borrow USD Coin (USDC) through Vires.Finance lending platform;


2) The money will be used to buy WAVES;


3) The tokens are converted to USDN and


4) Put back into Vires.Finance pool to buy more USDC.


The analyst also explained that USDN would become insolvent if WAVES crashed sharply.



Waves founder Sasha Ivanov denied those allegations on April 3, saying you can't move markets with over $1 billion in daily volume with a few million.


He also accused Alameda Research, a quantitative crypto trading firm owned by Sam Bankman-Fried, of launching a campaign against WAVES. A "group of paid trolls was used".


From a technical perspective, WAVES maintains its bullish trend and continues to trade above the two converging support levels: the 20-day EMA (green wave) around $40 and the 0.382 Fibonacci line at $42.50.


A clear break below the support lines could sink WAVES towards $30.

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