NIRVANA Loses $12M, its Stablecoin falls by 91%, and Its Native Token Decline by 85%.
Nirvana suffers a flash loan with a funding gap of over $12 million: ANA and NIRV decrease by 85% and 91%, respectively.
— PeckShieldAlert (@PeckShieldAlert) July 28, 2022
The algorithm stablecoin protocol Nirvana, which is built on Solana, is thought to have had a flash loan, and it now has a financing deficit of $12 million. The price of its stablecoin, NIRV, dropped from $1 to $0.09, representing a reduction of as much as 91 percent. Meanwhile, the price of its ANA token dropped from $8.9 to $1.5, representing a drop of as much as 85 percent.
According to several analysts, the recent decline in token value was anticipated. Due to the lack of liquidity, the prior price of ANA was bound to swiftly decrease to the floor price, which would then be decided by an agreement between ANA and its investors.
Stablecoins are facing a tough time after the Terra stablecoin UST disaster. Tron stable coin USDD also faced some problems a few weeks ago but now doing well.
NIRVANA is the first native computing stable currency project on the Solana chain. It is a dual-currency system whose liquidity is controlled by the protocol. It is divided into value currency: ANA and the stablecoin NIRV. ANA—which is a value storage coin—can be minted directly on the official website; that is, ANA is directly purchased by the stablecoin.
Nirvana’s treasury funds offer floor price support for ANA, while the liquidity pool provides liquidity for the market to sell ANA. This allows Nirvana to achieve the model of calculating stability plus treasury repurchase, which tries to safeguard the capital at the floor price.
When staking via ANA, however, NIRV may only be loaned at the maximum price of the floor price, and the agreement will levy a 3 percent handling fee. On the other hand, the stablecoin NIRV can be lent out by staking ANA or acquired through the secondary market.