Challenges to transparency and security have negative impacts on stablecoins. Stablecoin issuers need to examine their products and ensure they abide by the highest levels of transparency and security. The USN stablecoin is brought into the equation to bring trust to stablecoins as part of the NEAR ecosystem. The Decentral bank subsidises the overcollateralisation of the stablecoin and maintains its stability through on-chain arbitrage.
A Bit About USN
The USN stablecoin was released in April 2022, bringing a promising future despite being new and still testing the waters in the crypto market. Decentral Bank developed the stablecoin to work as the Protocol's Native coin. The stablecoin is secure and backed by a 1:1 basket of battle-tested stablecoins that make it thrive at stability. It has a generation of a native yield thanks to NEAR staking rewards and an extra outcome due to third-party Defi protocols such as protocol incentives and added revenue due to borrowing costs. USN offers composable cross-chain interoperability between different chains ad ensures that the transactions can be executed on L2 solutions such as Aurora without the user directly interacting with the other shards.
The native stablecoin of Near blockchain, backed by USDT, but only available on the Near network is shutting down after risky characteristics.CryptoLists.com
It is a NEAR-native stablecoin pegged to the US dollar and secured through on-chain arbitrage and a self-balancing reserve fund of NEAR tokens. The coin is 100% backed by USDT on a 1:1 ratio. The stablecoin was developed by the Decentral Bank, a decentralized organization for Near Protocol. The decentralized stablecoin does not hold the US Dollar reserves, but it is backed by a reserve fund that contains collateral such as the USDT and NEAR. The reliance of the coin on an algorithm ensures it maintains its price stability. As the stablecoin for the NEAR protocol, it was designed to improve liquidity and usability on the blockchain. Also, it does not have a total and maximum supply. It can adapt to bull and bear market conditions with different mechanisms depending on its phase. It also generates a sustainable yield that comes from native NEAR staking rewards. Therefore, its opportunities position it as one of the most effective ways to bootstrap liquidity in the NEAR ecosystem while adding a new layer of composability to $NEAR.
Utility of USN?
Anyone can use the token to make payments for peer-to-peer payments or to merchants who accept it as payment. Additionally, the token's utility comes in when it is used as collateral for margin trading or crypto loans, as the type of use varies depending on the exchange.
Another use for the stablecoin would be that the traders can store their funds when they exit crypto trades. USN provides more convenience to traders who want to close as it is easier for them to hold the funds then. Users of the token will soon earn passive income as the Decentral Bank aims to ensure it will be possible to stake USN and earn 10% APY.
Advantages of USN
+ USN is set to provide staking rewards of up to 10% APY.+ It facilitates cheap and fast transactions via the protocol infrastructure.
+ USN currently has easy access and low volatility, even if it's dependent on Near and USDT.
+ Adaptable to both bull and bear market conditions with a unique mechanism.
Disadvantages
- USN is not yet available on centralised exchanges.- It is yet to be integrated on all major NEAR and Aurora Dapps.
- USN is not yet available for payments on off-chain applications.
- It is exposed to critic comparisons with other controversial and failed stablecoins.
- There are only around 1550 holders of USN & they changed the algorithm once, but to the better.
Costs
▪ Rated at 9/10The algorithm stablecoin has great potential due to its stable ratio that is sustainable and hard to depeg. Therefore, the transaction costs and fees will depend on the rise in prices, depending on the coin's performance. The stablecoin provides an alternative saving protocol as when the USN is trading above a dollar in the market, arbitrageurs deposit NEAR in the Reserve Fund, and the protocol mints the equivalent dollar value of USN. When USN is trading below a dollar, arbitrageurs can purchase USN in the open market and redeem a dollar worth of NEAR from the protocol. Minting of USN and redemption of NEAR incurs a 0.5% to 0.1% fee depending on the market volatility.
Reputation and Buzz
▪ Reputation rated at 4/10▪ Buzz rated at 5/10
Social media platforms created the buzz surrounding the stablecoin, with reports on Twitter saying that the staking process currently earns about 11% returns. The stablecoin is pegged to the US dollar through on-chain arbitrage and a reserve fund. It maintains its peg via a smart contract facilitating NEAR and USN exchange at a minimal commission and zero slippage. Users want to be involved with a stablecoin with a more promising future than others. USN is an effective way to bootstrap liquidity to Defi protocols hence users decided to integrate the stablecoin and earn attractive yields. With such a reputation, it is the gateway for new users who come to the NEAR ecosystem. With numerous DApps integrating the stablecoin in the future, users in the decentralized exchanges and lending protocols will increase alongside the DApps TVL.
FAQ
What backs the USN stablecoin?
It is backed by a reserve fund containing NEAR and USDT with its initial supply double collateralised. So if de-pegging happens with Tether (USDT), it will also
Is the Near chain's stablecoin available on CEXs?
No, it is not yet available. Currently you can only buy USN on Huobi (review), from Ref Finance or Trisolaris.
History of USN
April, 2020 - Near Protocol launches the first version of their algorithmic stablecoin called USN. It worked in a similar manner to Terra´s stablecoin (UST).
9th of May, 2022 - The price of TerraUSD (UST) fell from parity with the US dollar to 0.1 USD.
July, 2022 - The white paper explains that USN is double-collateralized) with respect to initial issuance of USN – 100% USN amount available in NEAR and 100% in other stablecoins. That other stablecoin is USDT.
11th of September, 2022 - During NearCon, the new version of USN is promoted and given out to the 3000+ visitors. Crypto Lists received 5 USN for free, that could be used to buy beer at NearCon.
24th of October, 2022
It is announced that Near Foundation recommends to shut down USN. Owners of USN can now swap and transfer their Near stablecoin to USDT, thanks to a 40 million USD grant known as the USN Protection Programme.
Screenshots from USN
More sites where to buy/sell/trade USN
Below you can see some other platforms, exchanges and/or brokers where you can buy, sell or trade this token. Click on the logo to read our review.
USN Gets $40M Bail Out Fund from Near Foundation
