Overview
Waves is a Layer 1 blockchain founded in 2016 by Ukrainian-born, Russia-based Sasha Ivanov. The platform was designed to make token creation simple and featured a built-in decentralized exchange (DEX). It uses Leased Proof-of-Stake (LPoS) consensus and supports smart contracts via its Ride programming language.
The project's reputation was severely damaged in April 2022 when the Neutrino USDN algorithmic stablecoin (backed by WAVES) lost its dollar peg, falling below $0.80 and creating a death spiral. Allegations surfaced that Sasha Ivanov used borrowed stablecoins on Vires Finance to inflate the WAVES price — drawing direct comparisons to Terra/LUNA.
Technology
- Leased Proof-of-Stake (LPoS): Token holders lease WAVES to nodes for staking rewards
- Ride Language: Purpose-built smart contract language (non-EVM)
- Built-in DEX: Native order-matching exchange at the protocol level
- Performance: ~3 second blocks, ~100 TPS, near-zero fees
Ride is a custom language with a small developer base. The built-in DEX is outdated compared to modern AMMs. The technology is functional but unremarkable by 2025/2026 standards.
Security
USDN/NSBT Depeg Crisis
The defining failure of Waves was the Neutrino USDN depeg in April 2022. USDN was an algorithmic stablecoin backed by WAVES at a target collateralization ratio. As WAVES fell, USDN became undercollateralized, with NSBT failing to recapitalize the system. USDN traded as low as $0.50-0.70. Allegations emerged that Sasha Ivanov borrowed USDT/USDC on Vires Finance to buy WAVES and artificially inflate backing ratios. The Vires Finance lending protocol was effectively drained, locking depositors' funds. Community trust was irreparably damaged.
Decentralization
The validator set is small (~100 generating nodes) and concentrated. Sasha Ivanov and associated entities have historically influenced a significant portion of staked WAVES. Governance is informal and founder-driven. Geographic concentration in Russia/CIS creates geopolitical risk.
Ecosystem
The ecosystem has contracted severely since the 2022 crisis. TVL fell from a peak of ~$3 billion (much artificial/circular from USDN) to well under $100M. Many projects migrated away or shut down. Sasha Ivanov announced "Power Protocol" as a reinvention, but given the trust damage, it has gained little traction.
Tokenomics
- Supply: Initially 100M with limited inflation from block rewards
- Staking: LPoS with ~5% APY for leasers
- Token economics are overshadowed by the USDN debacle. Circular dynamics between WAVES price and USDN backing created artificial demand that has fully unwound.
Risk Factors
- USDN depeg: Algorithmic stablecoin failure with unresolved depositor losses
- Market manipulation allegations: Serious accusations against the founder
- Trust destruction: Community and project exodus from the ecosystem
- Geopolitical risk: Russia-centric project facing sanctions implications
- Vires Finance locked funds: Lending protocol depositors still face losses
- Founder risk: Sasha Ivanov's controversial reputation damages the project
Conclusion
Waves was once a promising L1 with genuine innovations. However, the USDN depeg and associated manipulation allegations have fundamentally damaged credibility. Unlike technical setbacks, trust damage from alleged insider manipulation is nearly impossible to repair. The ecosystem has contracted severely, and for most users and investors, the risk-reward profile is unfavorable.