Waves USDN Stablecoin Depegged Again during Protocol Upgrade

Waves backed stablecoin Neutrino Dollar (USDN) lost its dollar peg again. Stablecoins are under pressure following the TerraUSD (UST) crash.

 

The crypto community has been having a tough time as the bear market continues. The bear market has been exacerbated by the depegging of multiple stablecoins. Algorithmic stablecoins have been of particular concern following the collapse of TerraUSD (UST). Another algorithmic stablecoin is now struggling to maintain its dollar peg.

 

Waves algorithmic stablecoin USDN fails to maintain its dollar peg

Neutrino Dollar (USDN) is an algorithmic stablecoin of the Waves ecosystem. The stablecoin has once again lost its peg, which makes it the fourth time in 2022 alone that the stablecoin has struggled to maintain its peg to the U.S. dollar.

 

At the time of writing, USDN was trading at $0.98 per token. This represents a slight recovery and an attempt to reach its 1:1 dollar parity. During the past 24 hours, the data from CoinGecko shows that the stablecoin has gained by around 8.4%.

 

The team is already taking measures to address the stability of its stablecoin. One of the solutions is taking a vote that will implement changes within the parameters of the protocol.

 

After the vote was conducted and the proposals approved, the team also integrated new mechanisms that plan to boost the economics behind the protocol. These mechanisms include changing the maximum swap amount, supporting the ratio protection mechanics, and boosting the rewards distribution system.

 

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Stablecoins are under great pressure

Stablecoins are crypto assets expected to be more stable than other cryptocurrencies. However, the events of recent months have shown that these assets can be more volatile than the other cryptocurrencies.

 

In May, the Terra UST algorithmic stablecoin lost its peg and dropped below $0. The stablecoin’s collapse led to the fall of the Terra ecosystem, which was one of the largest blockchain networks at the time.

 

The collapse has seen more stablecoins losing their peg. The Acala network was recently exploited, which made the aUSD lose its peg by 99%. The exploit led to over 1 billion aUSD tokens being minted out of nowhere. This left its holders wondering if the stablecoin would recover its peg. At the time of writing, aUSD was trading at $1 after a 54% gain in 24 hours.

 

The HUSD stablecoin, a stablecoin backed by the Huobi exchange, has also lost its peg. The coin fell to $0.82 due to liquidity issues. The exchange said the depeg was due to a short-term depeg which the issuers and the re-pegged stablecoin later fixed.

 

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