Waves (WAVES): Blockchain with a Scammy Twist
By Yuliia Rokytska 1198 3 Jun 2023
The Waves blockchain was launched in 2016. It is a decentralized, open-source platform that enables the creation of scalable and user-friendly applications.
Supplementing the rather conventional portrayal on the Waves platform, a litany of equally classic advantages is expounded: superior processing speed, modest transaction charges, and a commitment to carbon neutrality.
In the year 2022, the architects of the blockchain initiated a substantial upgrade, metamorphosing Waves into Waves 2.0 by the onset of 2023. The consensus algorithm experienced a significant shift, transitioning from Proof-of-Stake to Proof-of-Stake Sharding. The intricacies of this mechanism and the specifics of the transition remain elusive. Nonetheless, online sources reference a process labeled with this nomenclature, which involves the horizontal partitioning of PoS blockchains to enhance scalability.
In a span of merely one year, the blockchain integrated a plethora of components into its operations: the Ethereum Virtual Machine, DAO, a series of enigmatic gravitational bridges, a zero-level inter-metaverse protocol, and much more.
WAVES, the native token of the blockchain, underpins its functionality through staking and is requisite for the execution of transactions. The market capitalization of this digital asset stands at a notable 221.5 million dollars. A total of 111.2 million WAVES are in circulation, with no defined upper limit.
Several of the Dapps constructed on this blockchain encompass:
- WX Network or Waves.Exchange (a decentralized cryptocurrency exchange featuring liquidity pools and inter-chain staking);
- Swop.fi (an automated liquidity pool-enabled market maker);
- Puzzle Network (a comprehensive DeFi application amalgamating DEX, cryptocurrency lending, and an NFT marketplace);
- Tsunami (offering perpetual cryptocurrency futures);
- Vires (focused on crypto lending).
Reasons to steer clear of the Waves project?
The genesis of the apprehension dates back to 2022, when one of the blockchain's projects, an algorithmic stablecoin known as Neutrino (USDN), began its unprecedented deviation from the dollar peg. Consequently, Neutrino, in tandem with the ostensibly "stable" coin UST (TerraUSD), plummeted dramatically. The erstwhile USDN has now evolved into an algorithmic index coin bolstered by cryptocurrency, named Neutrino Index (XTN).
In the midst of USDN's collapse, a multitude of cryptocurrency enthusiasts on Twitter levied accusations of market manipulation against Waves, facilitated by their lending platform, Vires.Finance, and denounced the project as a Ponzi scheme.
As we ushered in 2023, Waves.Exchange clients lodged a flurry of complaints, decrying their inability to withdraw the stablecoins USDT and USDC. Although the blockchain explorer affirmed the successful execution of transactions and the adequate capitalization of stable coins on this platform, Ethereum bridge statistics painted a starkly different picture, indicating the near absence of USDC and USDT on the DEX.
The conjecture at HAPI Labs purports that the decentralized exchange utilizes a centralized gateway, thereby obscuring the exact number of clients unable to retrieve their funds and the subsequent fate of these assets.
Previous instances of liquidity crunches, security breaches, thefts, and user grievances have marred the reputation of Waves.Exchange, and the lack of official responses to these unfortunate occurrences only exacerbates the situation.
Perhaps this explains the ominous disclaimer displayed on the Waves platform, in the section listing exchanges where their native token can be procured (Waves.Exchange included). It claims that none of the trading platforms enumerated have been endorsed by them, and all information is provided solely for informational purposes.
Another concerning aspects related to Waves:
- The project lacks a detailed tokenomics plan, including an explanation of token distribution;
- The roadmap only covers the year 2022;
- The coin supply is unlimited;
- To migrate to Waves 2.0, users had to withdraw their WAVES tokens from centralized exchanges and stake them on the network within a two-week period;
- The project is associated with DLTech Ltd, a company registered in the Seychelles, a known offshore zone used by scammers;
- The project's website lacks a team section, making it difficult to assess the people behind it.
Who founded the project?
The main figure behind the Waves blockchain is a person named Sasha Ivanov, who, on February 27, stated on his Twitter that he is originally from Zaporizhia and attached a post with the flag of Ukraine. Some mistakenly believe that Waves is a Ukrainian project, but it is more likely to be Russian. Several factors indicate this.
The Defiant has coined Waves as the "Russian Ethereum". Additionally, the Kraken blog mentions the collaboration between the Waves blockchain and the National Settlement Depository of the Russian Federation.
There have been conjectures surrounding the WAVES token, indicating that its substantial growth following Russia's military invasion of Ukraine may have been a deliberate attempt by project developers and other Russian individuals to circumvent imposed sanctions. During this period, WAVES witnessed an impressive 600% surge within a month, reaching an all-time high of $62 on March 31st. However, it is worth considering the possibility that this surge could simply be attributed to a typical pump-and-dump scheme.
What is being said about WAVES on Twitter?
Bearish sentiments prevail. Many users claim that this blockchain is a scam with infinite supply, similar to LUNC or BNX.
Additionally, there are reports of user deception by the Waves team and allegations of scams and fraudulent projects within their ecosystem. It's worth noting that there are ongoing warnings about Waves.Exchange, as users continue to face difficulties in withdrawing their funds.