Waves will replace USDN with a new token WIXT

What’s new? The team of the Waves blockchain network has decided to move Neutrino USD (USDN) from the status of a stablecoin to the status of a Waves Ecosystem Index Token (WIXT). The new token WIXT will no longer be pegged to the US dollar. The team announced this in an official announcement. USDN lost its parity to fiat currency back in March 2022. As of January 13, the asset is worth $0,327756 (CoinGecko’s data).

Post on the Waves blog

What is known about the projects? Waves launched in 2016 and uses the Leased Proof-of-Stake (LPoS) consensus algorithm. The platform is used to issue tokens and conduct crowdfunding campaigns. The WAVES token is used as collateral for USDN. Neutrino USD is released in 2019 on the Waves blockchain with the Proof-of-Stake (PoS) consensus algorithm and is fully backed by WAVES coins. Based on the Neutrino protocol, it is possible to create stablecoins tied to real assets such as national currencies or commodities.

Details on the new token. The Waves team notes that USDN cannot withstand unprecedented market volatility in the current situation, but it is still capable of performing important functions in the Waves ecosystem by switching to another model.

The WIXT token will be backed by a basket of Waves ecosystem tokens. The value of WIXT will fluctuate based on supply and demand, and indirectly based on the support ratio. The ratio is the total amount of all assets pledged relative to the value of the circulating supply. WIXT will aim for a 100% ratio, which should result in a value of $1. This, according to the developers, will provide greater stability because the value of the token will not be tied to the performance of just one asset.

One of the key aspects of USDN’s move to WIXT is the SURF token, which is designed to recapitalize USDN reserves. Specifically, 10% of reserves will be automatically converted from SURF to WIXT when the support ratio reaches 115%, using 10% of reserves to pay users.

This will create an arbitrage opportunity for SURF buyers. They will be able to issue SURF at the value of the ratio, and then when it reaches 115% (which is the goal of the protocol), the issued SURF will automatically be converted to WIXT at the current token price at that time.

The roadmap with all the details on the new token will be released in January, and the full rebranding of USDN to WIXT will occur in February 2023.

Earlier, Waves founder Alexander Ivanov presented a plan to save Neutrino USD (USDN) and the mechanism of operation of the future stablecoin of the second version. The latter includes multi-collateral and swaps. The Neutrino team proposed 5 solution options to increase USDN reserves and stabilize the peg to the US dollar.