Sasha Ivanov, founder and CEO of the Waves blockchain platform, plans to launch a new stablecoin amid the ongoing crisis of the Waves-backed stablecoin, Neutrino USD (USDN).
Ivanov took to Twitter on December 20 to announce the plan to resolve the USDN situation along with a new stablecoin project.
“I will be launching a new stablecoin,” the Waves founder wrote, adding that there will be a “USDN resolution plan in place before that.” He stressed that nothing new will be released or announced until the resolution of the USDN plan is in place. Ivanov also promised that the stablecoin will be “independent”.
Ivanov told Cointelegraph that the new stablecoin will be a “hybrid between an algorithmic stablecoin” and will be based on the decentralized autonomous organization model. “It will be implemented using an approach that is native to Waves and cannot be implemented on other chains,” he noted.
One of the main reasons for the USDN’s decline is that the current USDN model does not adapt to current market conditions, Ivanov said, adding that more robust models should be developed. Referring to USDN as an “incentive-based stablecoin,” he stated:
“Unfortunately, incentive-based models do not account for black swan events, they work in 99.9% of market conditions, but they are not able to withstand high market volatility.”
Despite USDN’s imperfections, Waves has no plans to abandon the stablecoin. “The USDN will not be completely removed, we are absolutely committed to stabilizing the USDN and the new stablecoin should help the USDN restore its value,” Ivanov said. The CEO added that overcollateralization and adaptive algorithms should help create “non-detachable assets.”
Neutrino USD is an algorithmic crypto-collateralized stablecoin pegged to the US dollar and backed by Waves. The USDN stablecoin has been struggling to maintain its 1:1 peg, missing the peg several times in 2022.
The USDN saw its first major crash in early April 2022, with the stablecoin falling as low as $0.8. Tok has subsequently missed its peg several times, with the latest crash taking USDN to $0.53. At the time of writing, one USDN token is worth $0.58, according to CoinGecko.
One-year Neutrino USD (USDN) price chart. Source: CoinGecko
The news comes amid cryptocurrency Waves (WAVES) seeing a significant drop in price due to South Korea’s crypto exchange authority, the Digital Asset eXchange Alliance (DAXA), issuing a warning on WAVES on December 8. According to data from CoinGecko, WAVES has lost approximately 30% of its value since DAXA issued the warning.
Waves later pointed to “misinformation” spread by some centralized exchanges that have been shorting the Waves token, despite the fact that “there is no fundamental distress in the Waves ecosystem.”
“The Waves team quickly responded to the baseless allegations, and some exchanges have since begun reversing their restrictions,” Waves noted in a blog post.
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