Bessie Liu

Macauley Peterson

Wintermute founder and CEO Evgeny Gaevoy has publicly accused Near Foundation and Aurora Labs for failing to uphold a deal which would see $11.2 million worth of USN, a Near protocol-native stablecoin, convert to USDT.



Gaevoy said Wintermute, which acquired the USN tokens from the <a href="https://blockworks.co/tag/alameda-research">Alameda Research</a> estate, made a deal to participate in the redemption under the preexisting <a href="https://pages.near.org/blog/statement-in-full-near-foundation-to-fund-usn-protection-programme/">USN Protection Program</a> (USNPP) designed by Near Foundation after the developer Decentral Bank <a href="https://blockworks.co/news/near-nixes-algorithmic-stablecoin-usn">decided to sunset the stablecoin</a> in October 2022.



Aurora Labs was responsible for setting up the program after receiving a grant from the Near Foundation.&nbsp;



According to Gaevoy in a <a href="https://twitter.com/EvgenyGaevoy/status/1722019058717986903">post on X</a>, Wintermute was tasked with facilitating the selling of an estimated 11.2 million in USN to FTX creditors under the assumption that they would later be able to redeem USN for USDT on a 1-1 basis.&nbsp;



“This confidence was based on public statements by NF, Near introducing us to Aurora and Aurora confirming in private chats that they can facilitate the redemption, in our specific case, in a couple of days,” Gaevoy <a href="https://twitter.com/EvgenyGaevoy/status/1722019058717986903">wrote</a>.&nbsp;



Aurora responded with a <a href="https://aurora.dev/blog/our-response-to-wintermute-s-claim">blog post</a> calling the claims “unfounded,” and asserting that Wintermute “tried to use the USN Protection Programme (USNPP) in a way that ran counter to its purpose and the terms of use.”



Gaevoy claimed that <a href="https://blockworks.co/tag/near-foundation">Near Foundation</a> did not honor commitments made, and the team was only offered 20% of the amount they were initially promised.



Aurora rebutted the claim, saying “[Wintermute’s] redemption request was inconsistent with the intended purpose of the USNPP,” and therefore declining the request, a decision made in consultation with the Near Foundation, was legitimate.



Gaevoy further noted that Wintermute offered alternative solutions, such as using the funds to buy and lock <a href="https://blockworks.co/tag/near">Near</a> tokens (<a href="https://blockworks.co/price/near">NEAR</a>), but received no cooperation from the Near Foundation team.



“The resulting loss would have been easy to sweep under the rug. Nevertheless, I made a decision to disclose this in the public interest, because I strongly believe it is my role to act in the best interests of the industry beyond the immediate commercial interest at hand,” Gaevoy wrote.



Near Foundation has not responded to Blockworks request for comment at time of publication. On Tuesday, coinciding with the start of the NEARCON conference in Lisbon, the foundation <a href="https://near.org/blog/enter-the-black-dragon-near-co-founder-joins-the-near-foundation-as-ceo">announced</a> that Near co-founder was appointed as CEO. He previously <a href="https://near.org/blog/illia-polosukhin-returns-to-near-foundation-council-to-continue-evolution-of-near-ecosystem-diogo-monica-founder-of-anchorage-joins-as-chairman">re-joined</a> the Near Foundation Council in October.



Gaevoy said that Wintermute will be pursuing legal action against both teams and that Wintermute is “fully committed to switching into a full-time adversarial mode.”



According to Gaevoy, Wintermute has no trading position on NEAR, however the NEAR token is down about 3% over the past 24 hours.



“Entering into a short position, though potentially worth the effort, would significantly dilute the overall message,” he <a href="https://x.com/EvgenyGaevoy/status/1722019542220607602?s=20">said</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Wintermute CEO accused Near Foundation of failing to redeem stablecoins

Ben Strack

As layoffs in the crypto space have persisted in recent weeks, one company in the segment has taken a different approach.



Crypto exchanges Bybit and Swyftx are among the crypto firms that have revealed <a href="https://blockworks.co/news/latest-in-crypto-hiring-more-fall-victim-to-persistent-layoffs">staff cuts</a> this month. Amber Group was set to cut its workforce from about 700 to fewer than 400, Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-12-09/crypto-s-amber-to-end-chelsea-sponsorship-axe-over-40-of-jobs-in-ftx-fallout?leadSource=uverify%20wall">reported</a>.



But Paradigm, an institutional liquidity network for crypto derivatives traders, <a href="https://twitter.com/tradeparadigm/status/1603111504869752832">said</a> Wednesday it decided to cut employee salaries by 15% as it looked to avoid headcount reductions.



“Post FTX&#8217;s collapse, it is clear the contagion is deep and wide and like many of our clients and peers, we are not immune,” the company tweeted. “Salary cuts reduce the need for layoffs seen across the ecosystem and have a lesser impact on org momentum.”



Paradigm revealed a <a href="https://blockworks.co/news/paradigm-and-ftx-team-up-to-launch-crypto-futures-spread-trading">partnership</a> in August with <a href="https://blockworks.co/news/the-madoff-playbook-how-ftx-creditors-could-get-their-money-back">now-bankrupt</a> FTX to launch spread trading.



A spokesperson for the company did not comment on how many employees would be impacted, or where it would allocate money saved from the compensation reductions.



<h3 class="wp-block-heading">Latest additions</h3>



Peeking Duck Studios appointed <a href="https://www.linkedin.com/in/kenneth-cron-8bbba52/">Ken Cron</a> as an executive adviser to help guide the Web3 game developer as it seeks to release its first game in the third quarter of next year.



Cron is currently the chair and CEO of Web3 holding company Coin Operated Group, as well as the executive chair of NFT company <a href="https://www.coolcatsnft.com/">Cool Cats Group</a>. He has been an adviser to the board of directors of blockchain gaming company Animoca Brands since 2020.&nbsp;



The executive was CEO of Vivendi Universal Games from 2001 to 2004, where he oversaw the launch of World of Warcraft, Starcraft and Diablo. He was chair of Midway Games after that and co-founded Uproar Games.



“It’s truly amazing to have access to someone who has done it all in the gaming industry, but also continues to be so cutting edge,” Peeking Duck Studios founder Sinjin Jung said in a statement.



Web3 infrastructure startup Toposware added <a href="https://www.linkedin.com/in/jeanettegorgas-growthleader/">Jeanette Gorgas</a> and<a href="https://www.linkedin.com/in/mimi-spier/"> Mimi Spier</a> as business advisers.&nbsp;



Gorgas is a former director of global markets at Deutsche Bank — a role she worked in from 1998 to 2010, according to her LinkedIn page. She was more recently the chief strategy officer at audit, tax and advisory firm Grant Thornton and now sits on various boards.



Spier has been a vice president of marketing and growth strategy at Turntide Technologies since March 2021. She previously spent stints at software company SAP in senior marketing roles.&nbsp;



Toposware is the lead developer of Topos, which seeks to allow developers to securely deploy natively interoperable sovereign execution layers and decentralized applications. Gorgas and Spier are set to support Topos’ strategic scaling and growth strategy as the protocol prepares to launch its testnet in 2023.



Horizen Labs named <a href="https://www.linkedin.com/in/zain-cheng/">Zain Cheng</a> as its chief technology officer — a promotion after joining the company in May 2021.



Previously Horizen Labs’ vice president of engineering, Zain led four product engineering teams across tools, sidechains, smart contracts and infrastructure.&nbsp;



Before joining the company, Cheng spent nearly seven years with subscription fashion service Rent the Runway as its senior director of engineering.



NEAR Foundation hired <a href="https://www.linkedin.com/in/mary-beth-buchanan-b2303127/">Mary Beth Buchanan</a> as a strategic adviser and added <a href="https://www.linkedin.com/in/sheilawarren/">Sheila Warren</a> and <a href="https://www.linkedin.com/in/jcw148/">Jason Warner</a> as participants of the NEAR Foundation Council.&nbsp;



The foundation is the non-profit that supports ecosystem development of the <a href="https://near.org/">NEAR Protocol</a>. Its council is similar to a corporate board of directors.



Buchanan is a former US attorney for the western district of Pennsylvania. Since then, she has worked as global chief legal officer for Merkle Science, and chief legal officer for Kraken and Bitstamp. Buchanan is the vice president of the Cardano Foundation’s board of directors.&nbsp;



Warren is the CEO of the Crypto Council for Innovation and previously founded the blockchain and digital assets team at the World Economic Forum.



Warner became a managing director at Redpoint Ventures in 2021 after working as chief technology officer for four years at developer platform GitHub.&nbsp;



Dinara, which offers a digital asset banking solution for venture capital firms and startups, hired <a href="https://www.linkedin.com/in/yani-martes/">Yanire Martes</a> as general counsel and Victor Guerra as head of compliance.&nbsp;



Martes most recently spent about a year as head of legal for the Americas at OANDA. She was also previously assistant general counsel at the International Swaps and Derivatives Association (ISDA) and a vice president at Morgan Stanley.&nbsp;



Before joining Dinara, Guerra was chief compliance officer for PrePaid-USA, where he oversaw various fraud and compliance operations. He also worked as an assistant vice president in the central risk and controls Office at MUFG.



“As the digital asset industry matures, customers are rightfully demanding business model transparency and robust compliance platforms as a prerequisite to doing business,” Dinara CEO Laurence Latimer said in a statement.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Latest in Crypto Hiring: Financial Services Firm Cuts Employee Salaries in Lieu of Layoffs

Shalini Nagarajan

<div id="highlights-block_6357b63652665" class="highlights">
 <ul>
 <li>USN became “susceptible to undercollateralization during extreme market conditions,” NEAR said</li>
 <li>The situation will make it hard for projects to maintain long-term interest in their algorithmic stablecoins, a crypto exec said</li>
 </ul>
 
</div>



NEAR Protocol is attempting to avoid another <a href="https://cms.blockworks.co/tag/terra" target="_blank" rel="noreferrer noopener">Terra-like</a> situation.



The protocol’s native stablecoin USN, which had a trading volume of <a href="https://www.coingecko.com/en/coins/usn" target="_blank" rel="noreferrer noopener">$9.7 million</a> in the last 24 hours, is gradually winding down due to risks of undercollateralization, <a href="https://near.org/blog/statement-in-full-near-foundation-to-fund-usn-protection-programme/" target="_blank" rel="noreferrer noopener">NEAR</a> said in a statement on Monday.



NEAR is a blockchain project that seeks to rival layer-1 protocols including Solana and Ethereum. It launched its own algorithmic stablecoin, issued by Decentral Bank (DCB), in April.



But after the stunning <a href="https://cms.blockworks.co/cryptocurrency-luna-lurches-as-terra-usd-volatility-continues-erasing-billions/" target="_blank" rel="noreferrer noopener">collapse</a> of Terraform Labs’ stablecoin TerraUSD (UST) in May, which wiped out more than $200 billion in the space, NEAR’s native-stable coin was made to transition to a non-algorithmic version backed by Tether (USDT) tokens, owing to potential risks.



Since USN was originally an algorithmic stablecoin, it became prone to undercollateralization during extreme market conditions, according to Decentral Bank. A separate double-minting issue also contributed to the undercollateralization, meaning there wasn’t sufficient collateral to back the token.



<h3 class="wp-block-heading">NEAR to use $40 million to protect investors affected by USN shutdown</h3>



The NEAR Foundation pegged the known collateral gap at $40 million, saying the imbalance “cannot expand further assuming DCB burns/destroys all the double-minted USN and promptly winds down the project in an orderly manner.”



It clarified that the gap is not associated with its native token NEAR, which provides utility within the protocol, and set aside $40 million in fiat currency to fund a “USN Protection Programme.”



<h3 class="wp-block-heading">Rough times for algorithmic stablecoins</h3>



Most stablecoins are backed by an asset like fiat currency or physical assets like gold. But algorithmic stablecoins aren’t backed by external assets, rather they rely on specific instructions to help the coin maintain its peg. Similarly, UST was not backed by the US dollar, instead using financial engineering with sister token LUNA to maintain its links to the dollar.



Jamie Thomson, CEO of NFT gaming studio Vulcan Forged, pointed out the disadvantages of algorithmic stablecoins: the lack of real asset backing means price stability isn’t guaranteed.



<blockquote class="wp-block-quote">“People were skeptical of algorithmic stablecoins after TerraUSD crashed, but now that NEAR protocol has closed its stablecoin, they have more evidence,” he told Blockworks via email.&nbsp;</blockquote>



“Where there are market movements traders could get profits, but it’s clear it will be now even harder for projects to maintain long-term interest in their algorithmic stablecoins,” Thomson added.



Although the NEAR Foundation believes its collateral gap can be contained, concerns over the future of stablecoins remain.&nbsp;



NEAR Foundation didn’t return Blockworks’ request for comment by press time.



Even one sign of weakness or a systemic issue is enough for a large-scale loss of trust, according to Simon Schaber, the chief business development officer at Spool.



Despite concerns over their critical characteristics, <a href="https://cms.blockworks.co/?s=beanstalk" target="_blank" rel="noreferrer noopener">Beanstalk</a> is among the algorithmic stablecoins still standing. The Ethereum-based stablecoin protocol suffered a $180 million exploit in April, but <a href="https://cms.blockworks.co/algo-stablecoin-protocol-beanstalk-relaunches-following-180m-hack/" target="_blank" rel="noreferrer noopener">resumed services</a> four months later. 



&#8220;Beanstalk uses a different mechanism than USN to create price stability. Bean, the stablecoin issued by Beanstalk, is backed by credit rather than any form of collateral,&#8221; a spokesperson told Blockworks.



This report was updated on Oct. 26 at 8:33 am ET to include Beanstalk&#8217;s comment.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

NEAR Nixes Algorithmic Stablecoin USN

Jacquelyn Melinek

<div id="highlights-block_61e05d2bfdd35" class="highlights">
 <ul>
 <li>In the past 24 hours, the NEAR cryptocurrency jumped 9.84%, or $1.72, to $19.36</li>
 <li>The funding will be used to accelerate its mission of helping people learn, use and adopt Web3 technologies</li>
 </ul>
 
</div>



NEAR Protocol has closed a $150 million capital raise led by Three Arrows Capital, the team shared in a blog post on Thursday.&nbsp;



The funding will be used to accelerate its mission of helping people learn, use and adopt Web3 technologies. The protocol has established communities in Asia, Africa and Europe, and is aiming to expand support in emerging communities in Latin America, Turkey and India, according to the blog.&nbsp;



“We are looking forward to leveraging the funding to improve access to blockchain technology in an ever growing list of countries across the world,” Marieke Flament, NEAR Foundation CEO said in a statement.&nbsp;



In 2021, the protocol said it allocated $800 million — which is now valued at about $1.8 billion — to help fuel its mission to decentralize the community and help users reimagine finance.&nbsp;



Since its mainnet launch in the fourth quarter of 2020, the NEAR network has processed over 70 million transactions while supporting over 2.3 million accounts.&nbsp;



The latest funding adds to its $65.9 million raised so far, from backers internationally, including Digital Currency Group, Pantera Capital, Electric Capital, Coinbase Ventures, Blockchain.com and Baidu Ventures. In total, the foundation has raised about $215.9 million.&nbsp;



In the past 24 hours, the NEAR cryptocurrency jumped 9.84%, or $1.72, to $19.36, according to <a href="https://coinmarketcap.com/currencies/near-protocol/" target="_blank" rel="noreferrer noopener">data</a> on CoinMarketCap at the time of publication. The majority of the spike occurred after the foundation released news of the raise.&nbsp;



A handful of funds invested in the private token sale, including Mechanism Capital, Dragonfly Capital, Andreessen Horowitz (a16z), Jump Capital, Alameda Research, Zee Prime and Amber Group.



Angel investors also participated in the round including Alan Howard, a billionaire hedge fund manager, Stani Kulechov, founder of Aave, and Santiago Santos, a member of PleasrDAO.&nbsp;



“We’re delighted to be backed by such a fantastic group of investors. It provides proof of what’s been built, and what’s to come,” Illia Polosukin, co-founder of NEAR Protocol, said in the <a href="https://medium.com/nearprotocol/near-raises-150m-f93eb106dbb1" target="_blank" rel="noreferrer noopener">blog post</a>.



NEAR did not respond immediately to a request for comment by Blockworks.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

NEAR Token Spikes After Protocol Raises $150M Led by Three Arrows Capital

<div id="highlights-block_61d4c705ba94f" class="highlights">
 <ul>
 <li>“2021 showed the results, both with volumes swelling to as high as $2.5 billion in one day, 60 new team members, over 100,000 community members, and the formation of the WOO DAO,” Ben Yorke, the marketing vice president at WOO Network told Blockworks</li>
 <li>WOO Network liquidity backs a number of decentralized protocols, including: dYdX, Matcha, ParaSwap, 1inch and DODO</li>
 </ul>
 
</div>



WOO Network has closed a $12 million Series A+ round just a few months after its <a href="https://cms.blockworks.co/neon-labs-raised-40m-woo-network-closes-30m-nexo-invests-in-texture-capital/">$30 million</a> capital raise in November, the company <a href="https://www.binance.com/en/blog/ecosystem/binance-labs-leads--$12-million-series-a+-investment-in-woo-network-421499824684903254" target="_blank" rel="noreferrer noopener">shared</a> on Tuesday. 



The round was led by Binance Labs and will support WOO Network’s expansion for talent, research and development as well as the development of new decentralized products.



“2021 showed the results, both with volumes swelling to as high as $2.5 billion in one day, 60 new team members, over 100,000 community members, and the formation of the WOO DAO,” Ben Yorke, marketing vice president at WOO Network, told Blockworks. 



Since 2021, the network has been providing liquidity on Binance Smart Chain through its decentralized WOOFi products, which uses data feeds and hedging strategies to provide depth and spreads of centralized markets without the need for excessive on-chain capital. WOO Network liquidity backs a number of decentralized protocols, including dYdX, Matcha, ParaSwap, 1inch and DODO.



“Being recognized by a top player like Binance really validates the progress, and puts WOO Network in a strong position to grow users and volumes throughout DeFi and [centralized finance] in 2022,” Yorke said.&nbsp;



The network aims to connect traders, exchanges, institutions and DeFi platforms with access to liquidity, trading execution and yield-generating strategies at close to zero costs.&nbsp;



The deep liquidity ecosystem’s Series A round in November was oversubscribed by 200% and backed by a handful of big investors such as Three Arrows Capital, Crypto.com Capital and QCP Capital.



In early December, WOO partnered with NEAR Foundation after completing a $5 million token swap to join the two projects, Blockworks previously <a href="https://cms.blockworks.co/woo-network-and-near-foundation-partner-after-closing-5m-token-swap/" target="_blank" rel="noreferrer noopener">reported</a>. As part of the partnership, WOO Network will become a builder in the NEAR Protocol ecosystem. The tokens have a five-year vesting period, and the platforms can collaborate to create shared value for their respective token economies, according to the announcement.



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening. <a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a> now.



<hr class="wp-block-separator"/>

Binance Labs Led $12M Investment Round for WOO Network

<div id="highlights-block_61aa5e86ff8f6" class="highlights">
 <ul>
 <li>WOO Network is a liquidity ecosystem that connects traders, exchanges, institutions and DeFi platforms with access to liquidity, trading execution and yield-generating strategies</li>
 <li>NEAR is a development platform built on a proof-of-stake, layer-1 blockchain</li>
 </ul>
 
</div>



WOO Network and NEAR Foundation have completed a $5 million token swap to create a partnership between the two projects, both organizations said in an announcement on Friday.&nbsp;



As part of the partnership, WOO Network will become a builder in the NEAR Protocol ecosystem.



The tokens have a five-year vesting period, and the platforms can collaborate to create shared value for their respective token economies, according to the announcement.



WOO Network’s decentralized autonomous organization (DAO) will stake the NEAR tokens to generate yield, use it in governance and retain commitment as a NEAR ecosystem stakeholder, Ran Yi, head of ecosystem at WOO Network, said in a statement. The WOO DAO will manage 300 million WOO tokens which will be used to accelerate its growth for the liquidity network.



NEAR is a development platform built on a proof-of-stake, layer-1 blockchain. In October, NEAR launched an <a href="https://news.yahoo.com/near-protocol-offers-800m-grants-130017836.html" target="_blank" rel="noreferrer noopener">$800 million</a> grants fund with a focus on decentralized finance (DeFi).



WOO Network is a liquidity ecosystem that connects traders, exchanges, institutions and DeFi platforms with access to liquidity, trading execution and yield-generating strategies. In November, it closed a $30 million round that was oversubscribed by 200%, Blockworks previously <a href="https://cms.blockworks.co/neon-labs-raised-40m-woo-network-closes-30m-nexo-invests-in-texture-capital/" target="_blank" rel="noreferrer noopener">reported</a>. 



The two projects have been “familiar for years” and have a lot of synergies, Ben Yorke, vice president of marketing for WOO Network, told Blockworks.&nbsp;



“NEAR&#8217;s blockchain is well-known for its technical strengths and developer-friendly design. WOO Network can provide liquidity and trading infrastructure, two of the most in-demand components for blockchain smart contract layers,” said York. “Therefore, this type of relationship can strengthen the relationship between the two projects, as a way of aligning incentives and solidifying the commitment to co-development.”



WOO Network provides liquidity used in ParaSwap’s private pools, which supports <a href="https://cms.blockworks.co/paradigm-leads-65m-round-for-decentralized-exchange-dydx/" target="_blank" rel="noreferrer noopener">dYdX’s</a> market maker Kronos Research. “The strategic relationship with NEAR will put us in a strong position to build the next generation of products powered by decentralized technology,” Yi said. 



<blockquote class="wp-block-quote">“Integrations like these will continue to grow as multi-chain applications are able to seamlessly bridge users and assets from one network to another,” said Yorke. “Users are becoming less restricted and as a result, will flow where technology layers and application layers can combine to provide the most value with the best experience.”</blockquote>



Overall, DeFi protocols have gained traction during 2021 with the total value locked hitting new all-time highs in November, <a href="https://defillama.com/" target="_blank" rel="noreferrer noopener">data</a> from DeFiLlama shows.



The DeFi market capitalization is around $150 billion, but could become a $15 trillion industry over the next five to 15 years if it attains the same success rate of about 50% to 70% as other disruptive technologies, according to a recent <a href="https://s3.amazonaws.com/static.bitwiseinvestments.com/Research/Decentralized-Finance-DeFi-A-Primer-for-Professional-Investors-11-16-2021.pdf" target="_blank" rel="noreferrer noopener">report</a> released by Bitwise.



<hr class="wp-block-separator"/>

NEAR foundation