Decentral Bank, a DAO established to develop and support Near-native stablecoins, announced Monday that $USN, an algorithmic decentralized stablecoin, has been launched on Near’s mainnet.
$USN, a dollar-denominated stablecoin, has become the first native stablecoin based on the Near protocol. Decentral Bank has enabled users to mint $USN using $NEAR, the protocol’s native token, through the NEAR web wallet. In addition, users can also trade the tokens using $USDT on Ref Finance’s StableSwap till the product is launched on multiple other CEXs and DEXs.
Meet $USN, the first NEAR-native stablecoin by Decentral Bank!
Starting today, users can mint $USN using $NEAR through the NEAR web wallet (https://t.co/Kc7Tr4M7B8). Users can also swap between $USN and $USDT on @finance_ref's StableSwap. pic.twitter.com/ZacQNGaTOV
— Decentral Bank (@DcntrlBank) April 25, 2022
Near’s native stablecoin $USN is similar to Terra’s algorithmic stablecoin TerraUSD ($UST). $USN also utilizes an algorithm to maintain its 1:1 peg against the U.S. dollar and adjusts its supply by issuing and burning $NEAR and USN respectively to keep its value constant.
Decentral Bank will also manage $USN’s reserves through a Reserve Fund based on the Currency Board principle. Elaborating on the process, the announcement noted:
“[The Reserve Fund] automatically balances to maintain a backing of $USN at a rate greater than 100% at all times. Initially, $USN will be double-collateralized by $NEAR and $USDT, the latter of which is pooled on NEAR’s main DEX, Ref Finance, and other CEXs to secure $USN’s peg to the dollar in the open market.”
Per the announcement, $USN will generate yield based on the $NEAR staking rewards. In addition, the protocol will distribute more than $10 million in rewards to $USN holders through lending platforms such as Burrow, Aurigami, and Bastion. For the first lenders, the protocol may even provide over 20% APY, but the APY will vary depending on the circulating supply and treasury size.
Anchor Protocol, a lending and borrowing Terra-based protocol, currently provides a little less than 20% APY on $UST deposits. With over 20% APY, Near could give a tough competition to $UST, which is the third-largest stablecoin by market capitalization presently
Demand for stablecoins has become evident as just last week, TRON (TRX) founder Justin Sun also announced plans to issue a stablecoin $USDD, which would be similar to $UST, and offer a 30% yield on staking.