Waves Plans New Stablecoin to Address USDN Depeg Issue
Waves (WAVES) founder Sasha Ivanov is set to address the ongoing depeg issue with the USDN stablecoin by launching a new stablecoin.
As reported by Coin68, Waves (WAVES) received a warning from cryptocurrency exchanges earlier in December due to concerns about the USDN stablecoin's persistent depeg over the past two months. Exchanges, led by Upbit, feared that USDN’s failure to return to the $1 mark could lead to a “second LUNA-UST” scenario, prompting them to place WAVES under special watch and even consider delisting.
USDN is an algorithmic stablecoin backed by WAVES and operates similarly to LUNA-UST. The repeated depegging of USDN throughout 2022 has raised serious concerns among Korean exchanges, especially since South Korea has experienced significant losses due to LUNA-UST.
The news led to a sharp decline in WAVES price, despite reassurances from the organization behind this layer-1 project addressing the criticisms from Korean exchanges.
On the afternoon of December 20, Waves founder Sasha Ivanov made a surprising announcement that a new stablecoin will be launched, aimed at providing a comprehensive solution to USDN’s current depeg issue.
Two things:
— Sasha.waves (@sasha35625) December 20, 2022
- I will launch a new stable coin
- There's gonna be a $USDN situation resolution plan set in motion before.
While specifics were not disclosed, Ivanov assured that the new stablecoin would have a mechanism different from USDN and “cannot be depegged.” Meanwhile, USDN and its derivative tokens will continue to exist.
$USDN and its sister tokens (surf and nsbt) will live. Nothing changes in this regard.
— Sasha.waves (@sasha35625) December 20, 2022
Waves' immediate goal is to stabilize USDN back to the $1 mark before the new stablecoin is introduced. Ivanov believes the current market conditions require a more suitable protocol.
To avoid misunderstanding: $usdn will do fine.
— Sasha.waves (@sasha35625) December 20, 2022
It’s just it’s time to create a protocol more attuned to the current market conditions. It will be easier to stabilize usdn first and launch the new protocol after.
So guys pls save your breath, waves is not going to zero lol.
The new proposal by Sasha Ivanov has sparked mixed reactions within the crypto community, with some expressing skepticism and questioning whether it will effectively revive Waves and USDN.
WAVES is experiencing a slight uptick in price following these latest developments, while USDN continues its downtrend, approaching $0.5—more than 50% below the $1 peg it is supposed to maintain.
1-Hour Chart of WAVES/USDT on Binance at 07:10 PM on December 20, 2022
Price Movement of USDN Over the Past Month
Screenshot from CoinMarketCap on the evening of December 20, 2022
In addition to the collapsed LUNA-UST model, the crypto market in the latter half of 2022 also saw NEAR Protocol’s USN stablecoin halt the acceptance of NEAR as collateral, eventually leading to its “death” in October.
Despite these setbacks, numerous DeFi projects continue to announce new stablecoin initiatives, such as Curve’s crvUSD, Aave’s GHO, and Coin98’s CUSD.
