Waves blockchain representatives deny any connection between the project and the USDN stablecoin

The stablecoin lost its peg to the dollar for the fifth time in a year, attracting the attention of South Korea’s regulator

12.12.2022 - 13:00

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What’s new? Waves blockchain representatives said that the algorithmic stablecoin Neutrino USD (USDN) issued on its basis is not internally linked to the network’s native token. They explained that USDN is a separate project that uses WAVES coins as collateral. The team’s statement comes as the Digital Asset eXchange Association (DAXA) of South Korea warned of the dangers of investing in WAVES on December 8, following another USDN depegging. Following this, the local exchange Upbit began a review of the asset, the outcome of which could be its delisting.

Statement on the Waves website

Details on the situation. Upbit believes that USDN is not properly pegged to the dollar, so investors risk incurring unanticipated losses due to the volatility of WAVES. During 2022, the value of the stablecoin has fallen significantly below the $1 mark five times. For example, it dropped to $0,82 in April and May, and to $0,89 on June 10. On August 26, the value of the asset dropped by 9% against fiat currency.

After falling in early December, USDN failed to regain parity with the dollar. On December 12, the value of the asset dropped to $0,78, according to the CoinGecko aggregator.

According to the Waves team, only 4,2% of the total WAVES supply is contained in the Neutrino smart contract, which is only 9,8% of the daily trading volume on all exchanges. In addition, USDN plays no role in the issuance of WAVES and cannot increase the supply of the asset.

Representatives of Waves are confident that concerns about WAVES tokens are unfounded misinformation, and they intend to continue working with exchanges to resolve misunderstandings.

Earlier, journalists of The Wall Street Journal reported on the risks for Tether because of problematic loans in USDT stablecoins.

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