WAVES: The So-Called "Russian Ethereum" and Its Shocking Ponzi Scheme Exposed!

I've been tracking WAVES since its inception, and let me tell you, what's happening behind the scenes is nothing short of criminal. This so-called "Russian Ethereum" raised $16 million back in 2016 - the second largest funding after Ethereum at the time - but what they've created is a ticking time bomb.

When the Russia-Ukraine war broke out in 2022, WAVES positioned itself as a financial safe haven during sanctions, which partially explains its price surge. But I've looked deeper, and what I found is far more sinister than mere market hype.

WAVES markets itself as an open-source platform for Web 3.0 applications with tools for dApp development. Created by Ukrainian-born Alexander Ivanov (aka Sasha Ivanov), who previously launched Coinomat exchange and CoinoUSD stablecoin, the project aims to be a financial blockchain for securities, crowdfunding, and fiat transfers.

Their tech seems impressive on paper - a modified Proof-of-Stake consensus mechanism called Leased PoS (LPoS), lightweight clients, and a plugin system for new transaction types without hard forks. The platform enables fiat-backed tokens, remittance services, and decentralized trading without withdrawal limits.

But here's the dirty truth I've uncovered...

DeFi researcher 0xHamZ exposed WAVES' Ponzi structure:

1. WAVES offers ridiculous 105.48% APY (up from 35% just three days prior) to borrow USDC/USDT, using these funds to pump their own token price

2. They then use inflated WAVES tokens as collateral to mint more of their native stablecoin USDN

3. This USDN is used as collateral to borrow more USDC/USDT from users

4. The whole system requires continuous WAVES price growth to remain stable

5. When they can't attract enough USDC/USDT deposits, WAVES loses its buying pressure and enters a death spiral. If WAVES market cap drops below USDN debt, the stablecoin depegs

The math is frightening. With 85% of WAVES' 100 million tokens staked, only about 10.5% are freely tradable, making the market incredibly easy to manipulate.

I watched their lending platform and noticed all USDC/USDT was already borrowed out. It's obvious - they're desperately trying to maintain this charade by offering yields no legitimate protocol could sustain.

When USDN issuance inevitably stops, there won't be any more WAVES buying programs, and the whole cycle will collapse rapidly. If WAVES price drops enough, USDN becomes undercollateralized and depegs, devastating users who deposited USDC.

This is a textbook Ponzi scheme built on borrowed money, and I'm calling it out before more people get hurt. Don't say you weren't warned.