Our Response to Wintermute's claim

Clarifying the Facts

Blog post cover

Today, Wintermute (WM) posted a tweet thread about Aurora Borealis Limited (ABL) and NEAR Foundation (NF) and we thought it important to provide some context.

First, we want to say that the claims made by Wintermute are unfounded.

The simple truth is that WM tried to use the USN Protection Programme (USNPP) in a way that ran counter to its purpose and terms of use. The USNPP was established to protect USN users and the NEAR ecosystem.

Contrary to that purpose, WM tried to exploit the programme to profit from the purchase of distressed assets from the Alameda estate. Due to this and other legitimate reasons, their claim was rejected. Rather than accept this outcome, they have decided to cast ABL and NF in a negative light.

In order to provide a clear picture of what actually transpired, the full context follows.

USN, a NEAR-native stablecoin, was created and launched by Decentral Bank on April 2022, which was an independently operated community-run project which had no direct financial assistance from NF or ABL.

After USN became undercollateralized in late October 2022, the USNPP was established and operated by ABL, to protect impacted users.

In August 2023, WM acquired 11.2m USN from the Alameda estate — nearly a year after the USNPP was introduced — and requested to redeem them for USDT. WM’s redemption request was inconsistent with the intended purpose of the USNPP, and the terms under which the programme was made available by ABL.

ABL, after discussions with NF, exercised its discretion under the USNPP terms of use and declined WM’s request.

The goal of the USNPP was to ensure that users who are actively participating in the NEAR ecosystem are made whole and protect the ecosystem. As a sophisticated market maker and investor, WM’s desire to close an arbitrage by purchasing distressed assets and profiting from their access is inconsistent with the USNPP’s purpose, and thus WM’s request was denied by ABL.

The decision ABL took was the right one, and is consistent with the purpose of the USNPP and the programme’s terms of use.

This site uses cookies.
Read more