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Decentral Bank DAO Stops Using NEAR As Collateral For USN

Decentral Bank, the DAO established to develop stablecoins on the Near Protocol ecosystem, said it has paused using NEAR for USN generation due to current market uncertainties.

Decentral Bank DAO is concerned about the market sell-off

USN developers officially announced the v2.0 version yesterday, intending to create a stablecoin that is truly stable and can “survive” the crypto winter.

Accordingly, USN v2.0 will move to a more flexible model and be implemented in two phases. The transition will be determined through DAO votes.

Phase 1: USN will be backed 1:1 with USDT. That is, 1 locked USDT will mint (create) 1 USN, and vice versa, 1 USN can be converted to 1 USDT. Profit will be generated from NEAR staking.

Phase 2: USN will be collateralized with non-stablecoin assets, starting with NEAR.

Overview of USN v1.0 and USN v2.0

USN is an algorithmic stablecoin with a 1:1 anchoring mechanism similar to the Terra ecosystem’s UST coin, meaning that to mint 1 USN, you need 1 USD worth of NEAR.

“Since it is impossible to predict how the market will move and if selling pressure continues, there is a high probability that USN will not be sustainable as NEAR will also follow the general situation.”

A representative of Decentral BANK DAO said in a statement

The recent market downturn has proven that current stablecoins have difficulty withstanding the pressures of the current crises.

Therefore, in addition to the newly updated version, Decentral Bank DAO also said it plans to add several popular stablecoins as essential collateral for USN, including USDT, USDC, and DAI. This strategy will make stablecoins more likely to “recover” should the market turn bad again.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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