8/29/2023 0 Comments Stablecoin death spiral![]() ![]() However, unlike Terra’s UST minting mechanism, NEAR used for such conversions is not directly burned but will be channeled into Decentral Bank’s Reserve Fund. In other words, after initial issuance, users can mint new USD with NEAR or other stablecoins at a 1:1 ratio, and they can also directly convert NEAR into new USN in the Sender wallet. Subsequently, the new USN will be directly minted with NEAR or other stablecoins at a 1:1 ratio. Decentral Bank issues the initial supply of USN through over-collateralization of the initial collateral (NEAR) at a ratio of 2:1. The initial supply of USN is double-collateralized by NEAR and USDT via the Reserve Fund. The DAO can vote to stake the NEAR from the Reserve Fund and distribute the staking rewards to the users of protocols that integrate USN. Decentral Bank (), the DAO developing and supporting USN, manages the smart contracts of $USN and its Reserve Fund. USN’s core stability mechanisms consist of on-chain arbitrage and the Reserve Fund based on the Currency Board principle. USN is positioned to be an effective way to bootstrap liquidity in the NEAR ecosystem while adding a new layer to NEAR’s utility as a token. About USNĪs the first NEAR-native algorithmic stablecoin, USN is soft-pegged to the US Dollar and backed by a Reserve Fund that contains collaterals such as NEAR and USDT. The fall of UST showed this nascent stablecoin how the death spiral of an algorithmic stablecoin can engulf and destroy everything like a terrifying black hole, and users also wonder whether USN could avoid a similar ending in the future. USN, a stablecoin native to an emerging public chain named NEAR, was launched almost at the same time as UST collapsed. ![]() Following the crash, algorithmic stablecoins have once again become a popular crypto topic. In May 2022, UST and LUNA, which once recorded a total market cap of over $40 billion, collapsed overnight, and plenty of users suffered huge losses as a result. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |