Warning on Vires Finance: It is effectively insolvent…

tl:dr: Vires Finance looted $540M from suckers to cash out Waves/USDN. It is probably insolvent. If you have any outstanding supply for anything, withdraw now.

More details:

Looking at the borrowing/depositing for USDT/USDC and USDN (Neutrino), it looks like Vires is almost insolvent, having been used as a massive amount of exit liquidity for big Waves bagholders.

Waves/Neutrino are like Luna/Terra: the latter is an algorithmic stablecoin backed by the former and one can convert back and forth as long as the peg is solid.

Now Waves has a “market cap” of only $500M. If one wanted to sell, say $600M of Waves you would totally crash the price before you are even through 1% of the amount.

But you convert the Waves to Neutrino, and then use the Neutrino to borrow USDT/USDC and voila, cashout. Yes, you are “paying” 30%+ interest on your borrowing, and have to take a 10% haircut, but the goal is never pay it back, just take the money and run.

And it looks like that is what has happened. Some $640M of Neutrino was pledged as collateral over the past few month and used to borrow $250M in Tether and $290M in Circle from suckers obviously attracted to the Ponzi interest rates.

So if you have anything “invested” in the Vires Finance effectively-a-ponzi-scheme, withdraw it now. Because you won’t be able to later, as you were the Waves wales exit liquidity.

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6 thoughts on “Warning on Vires Finance: It is effectively insolvent…”

  1. Im surprised USDN has held up this well so far, the insolvevncy has been known for a long time and the stablecoin went far off peg several time yet came back to peg time after time. Anyone know why? Seem strange during these times where Algo stablecoin fear is at ATH.

    Reply
  2. The market cap of WAVES is actually around $655M.
    But the question is: Is it possible for someone to hold value in WAVES that could be be higher than the market cap of $655M that could possibly crash WAVES if the person sells?

    To me I don’t think anyone could hold a value that is higher than the marketcap. I know a WAVES holder can hold a value that could be significant enough to cause a crash if the person sells but I don’t think is possible to hold WAVES that the value is higher than the market cap of WAVES.

    I don’t think what OP was right about WAVES analysis.
    That is my opinion.

    Reply
  3. Last time I checked deposited usdt and usdc was from alameda, do you know if its still the case ? Doubt they will loose a penny

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