Waves’ Neutrino USD (USDN) stablecoin de-pegs to $0.94
- The Neutrino USD (USDN) stablecoin was trading at $0.9418.
- According to CoinMarketCap, the stablecoin has hit a low of $0.8 today
- It is the third stablecoin to de-peg this week after TerraUSD and Tether.
Neutrino USD (USDN), an algorithm stablecoin just like the TerraUSD, has fallen below its US dollar peg to trade as low as $0.8 today. The stablecoin is part of Waves blockchain ecosystem.
Following the de-pegging, Colin Wu, a crypto analyst, has reported that the Curve pool for the USDN stablecoin (the USDN-3 pool) is now imbalanced with USDN now accounting for 93.68%. This was the same scenario for Terra’s UST Curve pool when it started falling.
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The imbalance in Curve’s USDN pool shows that the peg is under strain and it could require additional deposits to restore US Dollar parity for the stablecoin.
Previous USDN slippages below the dollar peg
The USDN is supposed to maintain its price at $1 but it has lost the parity and it is currently struggling at around $0.94.
This is not the first time that the USDN is showing signs of weakness. On April 6, it lost its US dollar peg and slid to a low of about $0.34 after users blamed the platform for manipulating the price of WAVES token through its decentralized finance (DeFi) platform, Vires.finance. At the time, the de-pegging did not cause much panic within the crypto space as compared to the current de-peg, which has happened after a catastrophe caused by the de-pegging of TerraUSD stablecoin, which is an algorithmic stablecoin like USDN.
The fact that the USDN stablecoin is an algorithmic stableoin like the UST, is making investors worry that the USDN could be headed in the same direction as the UST.
What is USDN?
USDN is Waves blockchain algorithmic stablecoin. It was designed in a similar manner to the TerraUSD, which is Terra blockchain’s algorithmic stablecoin.
Waves users are required to lock WAVES tokens inside Neutrino’s smart contracts to mint the USDN stablecoin. And to convert the USDN tokens back to WAVES, users are required to destroy the USDN something that balances the supply and demand while maintaining the stablecoin’s peg.