Neutrino USD (Waves)

USDN

USDN is an algorithmic stablecoin issued by the Neutrino Protocol and redeemable by WAVES tokens.

Risk Rating
Average
$0.04
-1.08%
Summary
What we like
Offers users a permissionless, decentralized method to gain exposure to USD that is backed by its underlying collateral.
What we like less
USDN is overcollateralized with WAVES token, which is highly volatile. USDN has often lost its peg to USD in the past, which defeats its purpose as a store of value.
What it means for you
USDN offers you a way to earn high yield on the Waves blockchain by putting USD to work for you in DeFi.
Information
Blockchain
  • Waves
Key Metrics
  • Market Cap: $3.4M
  • Fully Diluted Valluation: $3.4M
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #35
  • Circulating Supply: 76,223,732
  • Total Supply: 76,225,849
  • Volume (24H): $4.5K
  • ATH: $2.52 (03/17/2021)
  • ATL: $0.01 (04/14/2024)
Risk Assessment
Average
Asset Strength

USDN is a low-cap asset with questionable collateral reserves. This asset is exposed to the underlying risks of Neutrino, a protocol rated as Watch out.

USDN is a stablecoin that often trades more than 100bps off its peg to USD, making it a highly volatile store of value.

Asset Tokenomics

USDN has an uncapped supply but has inflation control or burn mechanisms in place. USDN is exposed to death spiral risk as its price depends on another asset, thus creating negative feedback loops. USDN is an algorithmic stablecoin that uses the WAVES token as collateral to mint/redeem USDN. When the value of WAVES rises against USD, a reserve fund is formed to provide backing in case WAVES price drops. When the reserve fund is not sufficient to compensate for a decline in value, the smart contract issues and sells NSBT tokens at a discount, enabling users to collect a profit by selling the token in the future.

Asset Volatility

USDN is a stablecoin that often trades more than 100bps off its peg to USD, making it a highly volatile store of value. When the value of WAVES rises against USD, a reserve fund is formed to provide backing in case WAVES price drops. When the reserve fund is not sufficient to compensate for a decline in value, the smart contract issues and sells NSBT tokens at a discount, enabling users to collect a profit by selling the token in the future.

Dependencies

Neutrino

Things to know about USDN

How is USDN created?

USDN is a collateral-backed stablecoin created by Neutrino. Its value is pegged to the USD and kept stable through an economic system of aligned financial incentives. USDN is minted when users lock WAVES in Neutrino and burned to release WAVES supply. Neutrino sets restrictions onw how many redemptions users can make in one day.

What is USDN used for?

USDN is a price-stable asset that is mostly used as a hedge against volatility as it maintains a stable value of around 1 USD. Users need an alternative store of value and medium of exchange to navigate the highly volatile crypto markets. USDN addresses this problem for crypto native users, as well as enables a wide range of financial activities including hedging during periods of high market volatility, market making against a stable asset, and use as collateral for leveraging.

How is the price of USDN kept stable?

USDN is an asset-backed currency that maintains a free-floating peg to the USD. This means that its value may differ from exactly 1 USD from time to time given current market conditions. USDN follows the overcollateralization model to maintain its peg through WAVES backing. As such, any deviations from the peg can also be counteracted by arbitration bots. When the value of WAVES rises against USD, a reserve fund is formed to provide backing in case WAVES price drops. When the reserve fund is not sufficient to compensate for a decline in value, the smart contract issues and sells NSBT tokens at a discount, enabling users to collect a profit by selling the token in the future.