The WAVES token halved in value over the past week as concerns over market manipulation by its creators persisted. The blockchain’s community recently also shot down a proposal to limit short positions on its DeFi platform.
While the crypto market has broadly fallen in the past week, WAVES has by far seen the sharpest losses among the top tokens. The token lost 50% in seven days, and was last trading at $21.85- levels seen prior to the token’s massive rally in March.
The token has also slumped nearly 200% from a record high hit last month.
Market manipulation FUD key trigger behind WAVES crash
While the token had surged over 100% through March, its founder, Sasha Ivanov, had come under fire for allegedly pumping the token through its DeFi platform, Vires Finance.
The accusations, which were levelled by Twitter analyst @0xHamz, came around the time WAVES was beginning a pullback from record highs. The token has plummeted since.
Ivanov denied the allegations, and said they were engineered by short sellers to profit from a large price drop in the token. But the following capital controls and a governance proposal to limit short-term borrowing on Vires were widely criticized by the crypto community.
The proposal was overwhelmingly voted against by the WAVES community.
Still, the allegations triggered a sharp fall in WAVES, and also saw Vires’ total value locked nearly halve. The platform’s stablecoin, Neutrino (USDN), also lost its peg against the U.S. dollar.
Where will WAVES go from here?
While the token has slumped from record highs, it is still trading at relatively higher levels. USDN also appears to have regained most of its 1:1 peg against the dollar, and is trading around $0.9775.
A part of WAVES’ large rally was also attributed to the project’s U.S. launch and its plans to raise funds to promote development on the platform. So far, the WAVES team has reiterated that its growth plans remain intact.
The strict capital controls imposed in the wake of the liquidity crunch are also expected to be temporary, the team said during a live AMA session.