Thread by @wavesprotocol

Time for the #Waves DeFi Revival Master Plan! 📜

Here is the plan to build Waves #DeFi back better than ever 👇🏻

wav.ink/3MX3PCv

2 major problems started April 2nd:
1️⃣ @neutrino_proto, $USDN stablecoin depegged from the USD - due to large selling of the USDN in the @CurveFinance pool
2️⃣ @viresfinance suffered a liquidity crunch - due to all the lenders deposits being loaned out to large borrowers

Both problems are still existing today.

$USDN is - almost - back to peg at $0.97 and Vires withdrawals are limited by the amount of liquidity that is repaid every day by borrowers.

We understand how hard this has been on the community, which is why this plan is so important.

Here are the steps:

1️⃣ Begin buying and locking CRV tokens with 45% of the $WAVES staking profits from Neutrino, and vote to incentivize the USDN 3-pool. To improve demand for $USDN.

Initial depeg due to the Curve Pool. It cannot be underestimated.

2️⃣ Liquidate large accounts, taking control over their collateral.

It is unfair that most users have to suffer due to a few large whales abusing the system. Sasha will liquidate the whale positions and slowly restore liquidity.

https://twitter.com/sasha35625/status/1529076417731997699

3️⃣ Sell their collateral without depegging USDN to return liquidity to @ViresFinance and reduce utilization rate, enabling larger user withdrawals.

Free up liquidity -> reduce UR -> enable withdrawals.

To avoid depeg - this likely takes 2 months to restore FULL FUNCTIONALITY.

4️⃣ Improve Neutrino architecture with a new recap token that recapitalizes Neutrino with new Waves Tokens when under-collateralized.

The $ value of the WAVES tokens in the Neutrino smart contract - the Backing Rate - is presently lower than the amount of USDN in circulation.

The new recap token will have 2 features:

💘 Users can issue the recap token using WAVES whenever the BR <1; and always redeem for $1 when BR >1.
💰 Holders receive 50% of $WAVES Staking rewards from Neutrino.

This way, we have a mechanism to recapitalize Neutrino.

Recap:

🧨 Join Curve wars to bring liquidity to USDN pool
🐳 Liquidate whale accounts and restore liquidity to Vires
💸 Slowly sell USDN collateral over 2 months
🪙 Issue new token to recapitalize Neutrino

Full plan is here👉wav.ink/3MX3PCv

We understand the difficulty all of our community members have faced during this crisis. Our DeFi teams have worked tirelessly to fix it, & have done so ONLY through decentralized governance.

Ur support has led here. Thank you for believing in us! #WAVESARMY 💪 #BUILDBACKBETTER