Approximately 14 days ago, the stablecoin neutrino usd (USDN) tapped a high of $0.994 per unit, and ever since then, USDN has not been able to rise above the $0.97 per unit range. The dollar-pegged asset is associated with the Waves blockchain protocol, and recently the Neutrino Protocol decided to add a token called SURF to USDN’s reserve basket in order to “improve the mechanics of recapitalizing USDN reserves.”
Waves Stablecoin USDN Falters, Team Adds SURF to Improve Algorithmic Stablecoin’s Reserve Mechanics, Waves Founder Dismisses Critics
Another stablecoin has shown a deviation away from U.S. dollar parity, as USDN tapped a low of $0.94 per unit on September 5, 2022. Coingecko.com statistics indicate neutrino usd dropped even lower the day before, slipping to $0.918 per coin. 30-day metrics show USDN dropped to $0.905 on August 26. It’s not the first time USDN has deviated away from the $1 parity. Prior to the August 26 low, year-to-date, neutrino usd has seen three more significant drops below the $1 price value.
Prior to August 26, on July 14, USDN’s price dropped to $0.938 per token and on May 11, USDN slipped to $0.824 per coin. On April 4, neutrino usd dropped even lower than the losses recorded on May 11, as USDN dropped to $0.787 per coin that day. In more recent times, the Neutrino Protocol added a token called SURF (Smart Utility Recapitalization Feature) to USDN’s basket of reserves. There are now four different tokens leveraged for USDN reserves as SURF joins the USDN stablecoin, NSBT, and WAVES.
Neutrino Protocol calls itself “an algorithmic price-stable assetization protocol acting as an accessible defi toolkit.” The team believes SURF will improve USDN’s backing ratio (BR) by achieving “BR equilibrium and provide additional incentives for the community and investors.” Some crypto proponents have said Waves developers are creating ways to make USDN “undepeggable,” and SURF is a solution toward that effort. Adding SURF to the USDN reserve mix has come under scrutiny and criticism as well.
Some individuals have said Waves is a Ponzi scheme and USDN has been compared to Terra’s UST. However, Waves founder Sasha Ivanov discussed the criticism with Coindesk on August 31 and he dismissed the comparison of USDN to Terra’s UST. “UST was backed by nothing – LUNA [the token] was burned to create UST. It was never intended to be backed up by anything other than the algorithm,” Ivanov told the reporter. “The opposite is true of USDN. WAVES tokens are held in a smart contract to collateralize USDN.”
What do you think about USDN remaining below the $0.97 per unit range and its deviations away from the $1 parity? Let us know what you think about this subject in the comments section below.
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Author: Jamie Redman