🔷 Waves Tech - a powerful blockchain-agnostic ecosystem

[coco23]

We've made it to the spring, and it's time to see where we stand! The February issue of our monthly digest focuses on DeFi tools in the Waves ecosystem and features our recent achievements and updates.

Hi Waves.support,
It would be great if you could address some of my open questions:

1) The Staking rewards for the LP tokens are pretty high right now. (Like 10-15% for BTC and ETH and >40% for USDC and USDT)
It is mentioned in the description of the Waves.exchange that the price of the LP tokens can never go down (however details are not mentioned). How is this possible? While logically this does make some sense to me for the stablecoins, I don't understand how this is achieved for volatile cryptos such as BTC or ETH? Is the liquidity there only provided to assets that are stable to BTC (or ETH respectively)? Or how is it done?

2) What are the risks of the Staking the LP coins? Of course I could imagine some sort of smart contract bug. Is there any other "black swan" event for those tokens? What would happen if for some reason the underlying asset goes down by 99%? What happens if the other side of the pair used for generating the stakes goes down 99%? What happens if ETH forks? (as most of the Staking is done on the ETH chain if I understood correctly)

3) Regarding the USDN tokens: They are backed entirely by Waves, is this correct? USDN has currently a backing ratio of ~2, so that way more Waves are locked than USDN are issued (in $). What would happen if Waves goes down by more than 50% and the backing goes below 100%? Would USDN fall below $1?

Thanks! 

[Waves.support]

That is due to the fact, that you do an airdrop to attract new customers and not the ones you already have.

Why do you think new customers are better and should be treated better than loyal customers?

In addition loyal customers will have rewarded themself for being loyal by buying NSBT for low price at the beginning.

Loyal customer isn't equal active customer, I am long-term (since ICO) hodler, and I cannot follow all the news all the time

So at the end loyal customers will always profit unindependent to whome those aidrops are given :-)

I hope we will profit anyway, too

Now I am waiting for good explanation of USDC/USDT staking  on Waves and its risk.

PS. Are all of the addresses from this list trustworthy (I'd prefer daily payouts):

Quite the opposite, in Waves Ecosystem the early adopters get the main benefits. Good example would be SWOP token launch and their early-birds program. So, join Waves and community chats to avoid missing any further updates.

[Waves.support]

Are there more projects planned on waves blockchain to work in similar way like Swop, and maybe something like uniswap exchange for waves?
It has much lower fees than ethereum and good potential for growth this year.

Actually you can say that Swop.fi is like Uniswap for Waves. And I agree, that fees and growth potential are its key advantages. Talking about other DeFi projects, in Waves there is already a stablecoin protocol Neutrino and we are looking for others to come.

[Waves.support]

I am following Waves for a while now, and I am a big fan of the platform and like the direction it is going.
I have a number of questions regarding the new developments on the Waves platform and would like to assess and understand their intrinsic risks better, it would be great if somebody could provide more knowledge or point me to a FAQ (if it exists)

1) The Staking rewards for the LP tokens are pretty high right now. (Like 10-15% for BTC and ETH and >40% for USDC and USDT)
It is mentioned in the description of the Waves.exchange that the price of the LP tokens can never go down (however details are not mentioned). How is this possible? While logically this does make some sense to me for the stablecoins, I don't understand how this is achieved for volatile cryptos such as BTC or ETH? Is the liquidity there only provided to assets that are stable to BTC (or ETH respectively)? Or how is it done?

2) What are the risks of the Staking the LP coins? Of course I could imagine some sort of smart contract bug. Is there any other "black swan" event for those tokens? What would happen if for some reason the underlying asset goes down by 99%? What happens if the other side of the pair used for generating the stakes goes down 99%? What happens if ETH forks? (as most of the Staking is done on the ETH chain if I understood correctly)

3) Regarding the USDN tokens: They are backed entirely by Waves, is this correct? USDN has currently a backing ratio of ~2, so that way more Waves are locked than USDN are issued (in $). What would happen if Waves goes down by more than 50% and the backing goes below 100%? Would USDN fall below $1?

4) One last question about swop.fi. This looks like a great addition to the Waves platform and it also has a nice FAQ. However, I couldn't find how are prices made? The trading doesn't seem to go over the Waves.exchange directly (or does it? the prices don't match with the waves exchange orderbook though). For instance if I buy a huge amount of BTC for USDN on swop.fi, what exactly happens with the LP-pool? How does it balance the USDN and BTC amounts after the purchase? As there is the (deterministic?) AMM algorithm behind I wonder if this algorithm could be abused in some sort of attack, especially for the pairs with at least 1 non-stablecoin, for instance in a flash crash or sudden price jumps?

Thanks in advance and keep up the good work

1) Staking rewards come from farming revenue: ERC-20 assets (USDC,USDT,BTC,ETC) are used to provide liquidity to different tools like Uniswap or Curve.fi. Liquidity providers (LP) tokens are the proof that you have staked your assets. LP-tokens grow in their price that includes the revenue for farming of ERC-20 assets.
2) The majority of risks appears because of Ethereum dApps logic bugs. Science tokens are provided to Uniswap or Curve as a liquidity, any issues with their contracts can affect investors. Another risk is the gateway scam risk science now ERC-20 coins are ported to Ethereum via a centralized bridge. This problem is going to be solved by Gravity protocol with its decentralized bridge.
3) There is an additional recapitalization token called NSBT with its own advanced tokenomics. If the BR falls, the issue price of NSBT on smart contract becomes really attractive for traders who start to buy it with WAVES providing an additional collateralization to Neutrino smart contract.
4) Swop.fi has an independent pricing mechanics. Price in the majority of pools is calculated with the AMM-formula and is usually same with Waves.Exchange prices because of arbitragers: if price of WAVES is falling in Swop.fi, one would be interested to buy it on Swop and instantly sell on Waves Exchange to earn arbitrage profit, which would make price on Swop grow.

[hd060053]

When we get the Binance NSBT Distribution?

[xyz]

When we get the Binance NSBT Distribution?

Seems it is already delivered. You can find it at binance "Transaction History", but it isn't shown in the spot wallet this moment.
Rate is about 0.00048 NSBT for 1 Waves.

[electronicash]

When we get the Binance NSBT Distribution?

Seems it is already delivered. You can find it at binance "Transaction History", but it isn't shown in the spot wallet this moment.
Rate is about 0.00048 NSBT for 1 Waves.

does it even have a value?

i have been received hundreds of tokens in my wallet but none of them appears to have any value at all. is it on swop?
there is no way of verifying whether the tokens received do have a market. i was interested to come back again to try trading since i can see waves.exchange volume had gained volume. quite good that it's competing and listed on CMC DEX too.

[xyz]

When we get the Binance NSBT Distribution?

Seems it is already delivered. You can find it at binance "Transaction History", but it isn't shown in the spot wallet this moment.
Rate is about 0.00048 NSBT for 1 Waves.

does it even have a value?

i have been received hundreds of tokens in my wallet but none of them appears to have any value at all. is it on swop?
there is no way of verifying whether the tokens received do have a market. i was interested to come back again to try trading since i can see waves.exchange volume had gained volume. quite good that it's competing and listed on CMC DEX too.

You are talking about your waves Wallet!? Yes there are many, many coins without any value.

But we are here speaking about an airdrop for Waves in the binance spot wallet. And this token NSBT has a value (this moment not for trading at binance, but in your Waves-Wallet)! It is a the waves backed Dollar-Token, and therefor the value of 1 NSBT is worth 1 US-Dollar.

[hopenotlate]

Not exactly, either on cryptocurrencymarketcap https://coinmarketcap.com/currencies/neutrino-system-base-token/ and on coinranking https://coinranking.com/coin/fWTaNV_Ff+neutrinosystembasetoken-nsbt nsbt price is over $ 20 currently.

[xyz]

Not exactly, either on cryptocurrencymarketcap https://coinmarketcap.com/currencies/neutrino-system-base-token/ and on coinranking https://coinranking.com/coin/fWTaNV_Ff+neutrinosystembasetoken-nsbt nsbt price is over $ 20 currently.

You are right! Sorry! It is Neutrino USDN, what is the stable coin of Waves.
For NSBT is written at Waves:

"NSBT holders get the power to influence decisions concerning the Neutrino protocol. It is important to note that if there is a surplus on the contract, the contract guarantees that it will buy the unlimited amount of your NSBT at any time at a price of 1 USDN. Thus, you are insured against the complete loss of your investment."

[estenity]

I am following Waves for a while now, and I am a big fan of the platform and like the direction it is going.
I have a number of questions regarding the new developments on the Waves platform and would like to assess and understand their intrinsic risks better, it would be great if somebody could provide more knowledge or point me to a FAQ (if it exists)

1) The Staking rewards for the LP tokens are pretty high right now. (Like 10-15% for BTC and ETH and >40% for USDC and USDT)
It is mentioned in the description of the Waves.exchange that the price of the LP tokens can never go down (however details are not mentioned). How is this possible? While logically this does make some sense to me for the stablecoins, I don't understand how this is achieved for volatile cryptos such as BTC or ETH? Is the liquidity there only provided to assets that are stable to BTC (or ETH respectively)? Or how is it done?

2) What are the risks of the Staking the LP coins? Of course I could imagine some sort of smart contract bug. Is there any other "black swan" event for those tokens? What would happen if for some reason the underlying asset goes down by 99%? What happens if the other side of the pair used for generating the stakes goes down 99%? What happens if ETH forks? (as most of the Staking is done on the ETH chain if I understood correctly)

3) Regarding the USDN tokens: They are backed entirely by Waves, is this correct? USDN has currently a backing ratio of ~2, so that way more Waves are locked than USDN are issued (in $). What would happen if Waves goes down by more than 50% and the backing goes below 100%? Would USDN fall below $1?

4) One last question about swop.fi. This looks like a great addition to the Waves platform and it also has a nice FAQ. However, I couldn't find how are prices made? The trading doesn't seem to go over the Waves.exchange directly (or does it? the prices don't match with the waves exchange orderbook though). For instance if I buy a huge amount of BTC for USDN on swop.fi, what exactly happens with the LP-pool? How does it balance the USDN and BTC amounts after the purchase? As there is the (deterministic?) AMM algorithm behind I wonder if this algorithm could be abused in some sort of attack, especially for the pairs with at least 1 non-stablecoin, for instance in a flash crash or sudden price jumps?

Thanks in advance and keep up the good work

1) Staking rewards come from farming revenue: ERC-20 assets (USDC,USDT,BTC,ETC) are used to provide liquidity to different tools like Uniswap or Curve.fi. Liquidity providers (LP) tokens are the proof that you have staked your assets. LP-tokens grow in their price that includes the revenue for farming of ERC-20 assets.
2) The majority of risks appears because of Ethereum dApps logic bugs. Science tokens are provided to Uniswap or Curve as a liquidity, any issues with their contracts can affect investors. Another risk is the gateway scam risk science now ERC-20 coins are ported to Ethereum via a centralized bridge. This problem is going to be solved by Gravity protocol with its decentralized bridge.
3) There is an additional recapitalization token called NSBT with its own advanced tokenomics. If the BR falls, the issue price of NSBT on smart contract becomes really attractive for traders who start to buy it with WAVES providing an additional collateralization to Neutrino smart contract.
4) Swop.fi has an independent pricing mechanics. Price in the majority of pools is calculated with the AMM-formula and is usually same with Waves.Exchange prices because of arbitragers: if price of WAVES is falling in Swop.fi, one would be interested to buy it on Swop and instantly sell on Waves Exchange to earn arbitrage profit, which would make price on Swop grow.

happy to see here some support , which is not bot-directed for maybe the first time.
however, you don't imagine the complexity of a system developed outside the main crypto forum (here).
we understand that progress is not made without new pitfalls.
now you have to deal with this complexity , and probably to explain it further, more extensively,
because i can assure you that a part of previous waves members are now lost in the jungle.

[Marquise$Museum]

The shorthand translation is that they accidentally launched a pyramid and there will be a "DAO" style bug/fund lock/hack to make everyone lose their money.

You are investing in insane risk right now that's all I can say if you put money into these contracts.

This is not even a hypotethical, they already did it before with WUSD, it's SOP as far as waves "stablecoins".

[Mallyx]

My main issue it the current SWOP.FI stuff.

I hardly believe that the Waves team is promoting a potential scam.

Look at all the contracts source (taken from https://github.com/swopfi/swopfi-smart-contracts):

Code:

@Verifier(tx)
func verify() = match tx {
    case _ => {
        let adminPubKey1Signed = if sigVerify(tx.bodyBytes, tx.proofs[0], adminPubKey1) then 1 else 0
        let adminPubKey2Signed = if sigVerify(tx.bodyBytes, tx.proofs[1], adminPubKey2) then 1 else 0
        let adminPubKey3Signed = if sigVerify(tx.bodyBytes, tx.proofs[2], adminPubKey3) then 1 else 0
        adminPubKey1Signed + adminPubKey2Signed + adminPubKey3Signed >= 2
    }
}

The Verifier function allow by a multisig to withdraw and control the funds (it also allow to update the dApp script).
It mean that if 2 peoples on 3 decide to run away with all the fund: the dApp will allow it.
We don't even know if their is 3 peoples or just 1...

The dApp point is to decentralize stuff the prevent trusting a third party.
In that case the third party has all the right (dApp update + funds control), so you must trust it.

tldr;
Swop.fi is NOT decentralized.

[Waves.support]

When we get the Binance NSBT Distribution?

It has to be already distributed!

[hd060053]

My main issue it the current SWOP.FI stuff.

I hardly believe that the Waves team is promoting a potential scam.

Look at all the contracts source (taken from https://github.com/swopfi/swopfi-smart-contracts):

Code:

@Verifier(tx)
func verify() = match tx {
    case _ => {
        let adminPubKey1Signed = if sigVerify(tx.bodyBytes, tx.proofs[0], adminPubKey1) then 1 else 0
        let adminPubKey2Signed = if sigVerify(tx.bodyBytes, tx.proofs[1], adminPubKey2) then 1 else 0
        let adminPubKey3Signed = if sigVerify(tx.bodyBytes, tx.proofs[2], adminPubKey3) then 1 else 0
        adminPubKey1Signed + adminPubKey2Signed + adminPubKey3Signed >= 2
    }
}

The Verifier function allow by a multisig to withdraw and control the funds (it also allow to update the dApp script).
It mean that if 2 peoples on 3 decide to run away with all the fund: the dApp will allow it.
We don't even know if their is 3 peoples or just 1...

The dApp point is to decentralize stuff the prevent trusting a third party.
In that case the third party has all the right (dApp update + funds control), so you must trust it.

tldr;
Swop.fi is NOT decentralized.

Ofc, it is not decentralized YET. Nothing besides Bitcoin is decentralized yet.

But Waves and it's additional tokens are designed to be decentralized --> so that can happen in the future.

Look at Binance Chain, it is obviously not decentralized. Also Ethereum is not really decentralized.

Look at their market cap value. Take it as an early mover advantage, if you hold Waves already. It has so much potential.

[hd060053]

Waves needs influencer marketing (youtube etc.), when will Sasha get this? Can you answer this @sasha or @WavesSupport?

Look at the popular youtube channels, they have hundredthousands of views, and Waves is NEVER mentioned. On reddit etc. Waves is NEVER mentioned.

Take some of the huge treasury to pay influencers and Waves will get 5x in no time, becaues the fundamentals are too strong.

[hd060053]

And Waves needs cooperation with external websites.

Why is Waves (DEX) and swop.fi still not on Sites like https://defipulse.com/

There are lots of other important sites like this.

[Mallyx]

My main issue it the current SWOP.FI stuff.

I hardly believe that the Waves team is promoting a potential scam.

Look at all the contracts source (taken from https://github.com/swopfi/swopfi-smart-contracts):

Code:

@Verifier(tx)
func verify() = match tx {
    case _ => {
        let adminPubKey1Signed = if sigVerify(tx.bodyBytes, tx.proofs[0], adminPubKey1) then 1 else 0
        let adminPubKey2Signed = if sigVerify(tx.bodyBytes, tx.proofs[1], adminPubKey2) then 1 else 0
        let adminPubKey3Signed = if sigVerify(tx.bodyBytes, tx.proofs[2], adminPubKey3) then 1 else 0
        adminPubKey1Signed + adminPubKey2Signed + adminPubKey3Signed >= 2
    }
}

The Verifier function allow by a multisig to withdraw and control the funds (it also allow to update the dApp script).
It mean that if 2 peoples on 3 decide to run away with all the fund: the dApp will allow it.
We don't even know if their is 3 peoples or just 1...

The dApp point is to decentralize stuff the prevent trusting a third party.
In that case the third party has all the right (dApp update + funds control), so you must trust it.

tldr;
Swop.fi is NOT decentralized.

Ofc, it is not decentralized YET. Nothing besides Bitcoin is decentralized yet.

But Waves and it's additional tokens are designed to be decentralized --> so that can happen in the future.

Look at Binance Chain, it is obviously not decentralized. Also Ethereum is not really decentralized.

Look at their market cap value. Take it as an early mover advantage, if you hold Waves already. It has so much potential.

You missed my point I guess.
I'm not speaking of the Waves blockchain itself but of the SWOP dApp.

They have currently above $40M of user's liquidity that the SWOP dApp operators can withdraw anytime.
It's not the purpose of a dApp, they can turn that into a scam if they want.

[unheiliger]

My main issue it the current SWOP.FI stuff.

I hardly believe that the Waves team is promoting a potential scam.

Look at all the contracts source (taken from https://github.com/swopfi/swopfi-smart-contracts):

Code:

@Verifier(tx)
func verify() = match tx {
    case _ => {
        let adminPubKey1Signed = if sigVerify(tx.bodyBytes, tx.proofs[0], adminPubKey1) then 1 else 0
        let adminPubKey2Signed = if sigVerify(tx.bodyBytes, tx.proofs[1], adminPubKey2) then 1 else 0
        let adminPubKey3Signed = if sigVerify(tx.bodyBytes, tx.proofs[2], adminPubKey3) then 1 else 0
        adminPubKey1Signed + adminPubKey2Signed + adminPubKey3Signed >= 2
    }
}

The Verifier function allow by a multisig to withdraw and control the funds (it also allow to update the dApp script).
It mean that if 2 peoples on 3 decide to run away with all the fund: the dApp will allow it.
We don't even know if their is 3 peoples or just 1...

The dApp point is to decentralize stuff the prevent trusting a third party.
In that case the third party has all the right (dApp update + funds control), so you must trust it.

tldr;
Swop.fi is NOT decentralized.

Ofc, it is not decentralized YET. Nothing besides Bitcoin is decentralized yet.

But Waves and it's additional tokens are designed to be decentralized --> so that can happen in the future.

Look at Binance Chain, it is obviously not decentralized. Also Ethereum is not really decentralized.

Look at their market cap value. Take it as an early mover advantage, if you hold Waves already. It has so much potential.

You missed my point I guess.
I'm not speaking of the Waves blockchain itself but of the SWOP dApp.

They have currently above $40M of user's liquidity that the SWOP dApp operators can withdraw anytime.
It's not the purpose of a dApp, they can turn that into a scam if they want.

It is nice that at least somebody has identified that point.

Perhaps it is a little naiv, but isn't it better to have a backdoor so that you can do something when something is going totaly wrong?

Also the whole governance part is still missing and therefore they migth have thougth they need a solution for an update.

[Mallyx]

An emergency switch yes, but a full control is not good.

An example of emergency switch that doesn't allow the admins to steal the users funds and reduce hacking damages:

1. You have an emergency function that freeze everything: deposits, withdrawals, interests, etc... It give times to the admins to find the issue.
2. If the issue can't be fixed for some reasons, the 2nd emergency function auto-transfer every single funds to an other already specified dApp address.
3. On that "emergency" dApp address, a simple script allow the users to redeem their funds with the tokens they got by lending, providing liquitidy, etc.... Nobody else can withdraw, including the admin team.

Want to see how look such script ?
I took 5min to write it. It's an incomplete script, it's only to show how easy that can be done.

Code:

# Function to freeze
@Callable(i)
func emergencyFreeze(enable: Boolean) = {
  if(this != i.caller) then {
    throw("Access denied")
  } else {
    [BooleanEntry("freeze", enable)]
  }
}

# Place it on each callable function. If frozen just reject the request
func isFrozen() = {
  match getBoolean(this, "freeze") {
    case a: Boolean => a
    case _ => false
  }
}

# Emergency transfer function
@Callable(i)
func emergencyTransfer() = {
  if(this != i.caller) then {
    throw("Access denied")
  } else {
    let receivingAddr = "AddrThatIsAlreadyKnown"
    [ScriptTransfer(...)]
  }
}

A little effort in scripting could prevent:
- Admins to run away with the funds
- Stops an ongoing hack.
- Allow user to redeem remaining funds.
- Prevent $5 wrench attacks (if the attacker get the admins private key, he only have to power to freeze and auto transfer, but not the power to withdraw the funds for self)

Don't trust. Verify.