Another algorithmic stablecoin has lost its peg to the US dollar – we are talking about Neutrino USD (USDN) stablecoin on the Waves blockchain. While the rate has not fallen too much, the token is trading at $0.90.
The Neutrino protocol on the Waves network allows various projects to launch algorithmic stablecoins and tools for decentralized finance (DeFi). Currently, 9 tokens pegged to various fiat currencies work on the basis of the protocol. In the case of USDN, the peg is to the US dollar and the collateral is held in the WAVES coin.
Apparently, the reason for the loss of peg was the fall in the WAVES rate by 3.8%. At the same time, the recent update of the USDN protocol introduced changes that should have further improved the stability of the token. Apparently, the changes did not help much.
However, earlier USDN fell even more significantly – in April, the token rate fell to $0.78. Perhaps the actions of the Waves management, which took out a $500 million loan to stabilize the situation, helped to keep the course. However, Waves founder Alexander Ivanov warnedthat the recovery of the USDN rate may take a long time. He did not rule out additional volatility in the stablecoin rate.
At the end of July, Tobias Adrian, director of capital markets at the International Monetary Fund (IMF), said that algorithmic stablecoins will continue to face problems.
Source: Bits
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