NEAR Protocol to give up its USN stablecoin due to collateral problems

As part of the refund program, holders of the asset will be able to exchange it for wrapped USDT stablecoins

25.10.2022 - 12:30

383

2 min

What’s new? The developers of the NEAR Protocol blockchain have announced the end of support for their algorithmic stablecoin USN. Representatives of the network reported that the stablecoin became “susceptible to undercollateralization during extreme market conditions,” which could pose risks to investors. The NEAR Foundation allocated $40 million to reimburse USN holders.

Announcement on the NEAR blog

More details about the situation. The issuer of the stablecoin, Decentral Bank, confirmed the closure of the project. The company noted that USN has faced many hurdles over the past few months due to “increased regulatory focus, and changes in market perception from recent high profile incidents.”

The reimbursement program will be launched after Decentral Bank completes a series of organizational steps to close the project, it will be available until October 24, 2023. USN holders will be able to exchange them at a 1:1 ratio for wrapped USDT.e (Tether Avalanche Bridged) stablecoins, a program run by a subsidiary of Aurora Labs, a developer of an EVM blockchain based on NEAR.

The NEAR platform was launched in 2020, and as of October 25, 12:20 UTC, the ecosystem’s total value locked (TVL) is $132,91 million, according to DefiLlama. There are more than 20 million accounts and 800 projects on the network. On average, up to 400 000 transactions are made on the network per day, and their total number has already exceeded 200 million.

The project’s native token, NEAR, is trading at $2,912, having lost 1,79% per day, according to Binance. The asset ranks 31st in the overall cryptocurrency ranking with a capitalization of $2,4 billion. For more details on the project, see GetBlock Magazine’s review.

Tether launched USDT on the NEAR blockchain in September. Tether CTO Paolo Ardoino noted that NEAR experienced historic growth this year, expressing hope that “Tether will be essential in helping it continue to thrive.”

Author: