The crypto community on Twitter X is buzzing about the drama between the leading market maker Wintermute and the organization behind NEAR Protocol – NEAR Foundation. Wintermute CEO Evgeny Gaevoy said his market maker is no longer friends with NEAR Foundation and Aurora Labs.
The reason originated from USN, an algorithmic stablecoin based on LUNA-UST model released on NEAR Protocol in April 2022, committing to offer an annual interest rate of 10%/year for holders. However, after LUNA-UST collapsed a month later, USN gradually lost its value and in October of the same year, the project was dead.
NEAR Foundation and the EVM running on NEAR Protocol – Aurora, opened a $40 million fund to support USN to USDT conversions after USN became undercollateralized.
Accordingly, they bought 11.2 million USN from FTX for $11 million, then coordinated with NEAR Foundation and Aurora to redeem USN to Tether USDT. The transaction was confirmed by the NEAR Foundation and Aurora, and stablecoins were transferred to Aurora in August 2023, but after 2 and a half months, the market maker still hadn’t received any USDT. Finally, NEAR Foundation and Aurora said they could only pay 20% of the $11 million. This means Wintermute has lost $8 million.
Gaevoy said Wintermute would pursue “all legal avenues” against NEAR and Aurora – the organization responsible for allowing the transfer of assets from the Ethereum network to the NEAR protocol.
NEAR Foundation and Aurora Labs didn’t respond to a request for comment. NEAR is down 8% today, even though it had grown more than 70% from mid-October to early November thanks to the Nym partnership.