- The Waves community has decided to back a governance proposal, with the aim of rebooting the decentralized finance (DeFi) lending protocol Vires.Finance.
- Vires went offline due to a liquidity crisis, so its goal is to stabilize the project and compensate affected users.
The Waves community has decided to back a governance proposal, with the goal of rebooting the decentralized finance (DeFi) lending protocol Vires.Finance, which had been offline due to a liquidity crisis, according to a Press release.
It should be said that the Waves-based DeFi platform has gone through a series of relevant problems in recent months, especially after the Waves-based Neutrino (USDN) stabelcoin lost its parity with the dollar.
This resulted in Vires experiencing a “bank run” after the unlink event occurred, leaving users unable to withdraw their funds from Vires Financelending platform similar to Aave or Compound, which resulted in, $500 million dollars in lost funds.
The vote is intended to stabilize the project and compensate affected users.
Proposal
As a containment measure, the Vires team presented a proposal to the community that could provide a possible solution which intends for users to be compensated through various methods.
In order to make these methods effective, Sasha Ivanov, founder of Waves, assumed the debt of the $500 million dollars in his own wallet, with which he could better maneuver the payment or reimbursement of the affected users. With this measure, Vires users will have the choice between receiving a refund or keeping their funds in the protocol.
The proposal states that when it comes into force, Vires users who manage accounts with the stablecoins Tether and USD that exceed $250 thousand dollars will be able to exchange their positions for the Neutrino stablecoin with a one-year acquisition period, in addition to a bonus of 5 percent settlement.
For its part, the second possibility is that users keep their positions as they currently are (at 0% APY). This option gives the founder of Waves the necessary time to pay off the debt he owns, liquidating the positions in USDNalthough it was noted that these will be processed depending on market conditions.
In this regard, Ivanov thanked the community, since according to his own words, he will always have the last word on this type of issue.
“In the midst of the ongoing crypto winter, it is essential to remember and highlight the core values of decentralization, immutability, absence of institutional greed, and inclusiveness that underpin the blockchain industry. Unlike other platforms, Vires.Finance and Waves continue to weather this storm, largely thanks to the loyal and determined community that always has the last word on the matter”Ivanov indicated.
Also, those holders of gVires, will have the possibility of exchanging “two months of APY through the income system”.
The crypto firm pointed out in this regard, that dThis vote is “a final step to stabilize the project and pay all affected users.”
Stablecoins in everyone’s sights
So far this year, the disappearance of a lending protocol as well as its stablecoins is already a recurring theme in the crypto environment and, following the fall of Terra USD, logarithmic stablecoins have captured the attention of the whole world. since its disassociation from the dollar called into question what makes a stablecoin a stable currency, that is, its parity with the dollar.
It is important to note that the stablecoins Algorithmics that have the ability to deliver relatively higher performance are not backed or supported in whole or in part by fiat currency. In compensation, they rely on the code to forecast how people and enthusiasts will respond to market and macroeconomic momentum.
However, what once attracted the attention of many users has now turned against it, and although starcoins remain an important pillar of the crypto market, users are betting on stablecoins that can guarantee their backing to maintain their value. 1:1 with the dollar as is the case with USDT and USDC.
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