The collapse of TerraUSD (UST) has created such a state of collective panic among investors that stablecoin issuers are working hard to avoid a remake. The case of USN, the Near Protocol native stablecoin currently at end of life, has many members of the crypto community worried. In order to reassure USN holders, NEAR Foundation released the tidy sum of 40 million dollars as insurance.
NEAR Foundation, an escape route for USN holders
After noting an algorithmic failure at the stablecoin level, Decentral Bank (DCB) is forced to liquidate USN, a stablecoin of which it is the issuer. In this way, she hopes to avoid a reproduction of a situation similar to Terra’s stablecoin, the UST. Note that the latter was the victim of a de-peg to the dollar last May.
That’s not all. Indeed, Near Foundation implemented the “USN Protection Program” on October 24th.
” In response to recent issue with USN, @NEARFoundation funds protection program for USN holders. »
On his blogthe foundation provides details for crypto-enthusiasts:
” The NEAR foundation recommends that DCB liquidate the USN in an orderly manner. In order to achieve this, it awarded a US$40 million grant to a subsidiary of Aurora Labs – one of the largest contributors to the NEAR ecosystem – to set up the USN protection program. »
After which, the NEAR Foundation made the aforementioned grant available to USN users. Thus, they will be able to swap their devalued stablecoins, on a 1:1 basis, for USDT.e once the redemption is authorized.
USN, what?
First, the USN is an algorithmic dollar-pegged stablecoin launched by DCB last april. It is backed by a reserve fund including NEAR cryptocurrency and USDT. A few months later, this first stablecoin of the Near Protocol blockchain is threatened with “ under-collateralization “. A deficit amounting to tens of millions of dollars was gradually emerging. At the same time, many investor perception issues related to the Terra drama were emerging.
Additionally, Decentral Bank believes that the upgrade to USN v2 accelerated its downfall.
Currently, no eligibility criteria have been advanced for the grant advanced by Near Foundation. However, USN holders would do well to stay tuned for practical information well in advance of the protection program expiration date.. It has been set for October 23, 2023.
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