Waves CEO and founder Sasha Ivanov announced that his new stablecoin would be “undepeggable” days after USDN lost its peg with the US dollar.
In light of the continued problems with the Waves-backed stablecoin, Neutrino USD, creator, and CEO of Waves Sasha Ivanov, plans to introduce a new stablecoin (USDN).
On December 20, Ivanov announced the USDN crisis resolution strategy and a new stablecoin initiative on Twitter.
The Waves founder stated, “I will introduce a new stablecoin,” and added, “USDN situation resolution plan set in action before.” He emphasized that something new will be introduced or disclosed once the USDN plan resolution is implemented. The stablecoin will be “undepeggable,” according to Ivanov’s promise.
According to Ivanov, the new stablecoin will be a “hybrid between an algorithmic stablecoin,” and it will be built on the decentralized autonomous organization paradigm. He added that it would be implemented using a method unique to Waves and could not be applied to other chains.
Ivanov added that more reliable models should be created and that one of the main causes of the USDN fall is that the existing USDN model needs to be adjusted to the current market conditions. He called USDN an “incentives-based stablecoin” and said:
“Unfortunately, black swan events are not taken into consideration by incentive-based models. These models perform well in 99.9% of market scenarios but cannot sustain extremely high levels of market volatility.”
Waves intend to keep pursuing USDN despite its flaws. According to Ivanov, the new stablecoin should actually enable USDN to regain its value, who added that “USDN will not be fully phased out.” He added that “we are dedicated to stabilizing USDN.” Overcollateralization and adaptive algorithms, the CEO continued, should aid in the creation of “undepeggable assets.”
Neutrino USD is a Waves-backed algorithmic crypto-collateralized stablecoin tied to the US dollar. The 1:1 peg of the USDN stablecoin has been difficult to keep; it was lost several times in 2022.
Early in April 2022, USDN experienced its first significant crash, with the stablecoin falling to $0.8. Since then, the tok has repeatedly lost its peg, with the most recent drop pushing USDN to as low as $0.53. According to CoinGecko, one USDN token is now worth $0.58.
Price chart for Neutrino USD (USDN) over a year. from CoinGecko
The announcement coincides with a sharp decline in the price of the Waves cryptocurrency after the South Korean cryptocurrency exchange regulator, the Digital Asset Exchange Alliance (DAXA), issued a warning on WAVES on December 8. Since the DAXA issued the warning, WAVES has lost roughly 30% of its value, according to statistics from CoinGecko.
After that, Waves claimed that some centralized exchanges have been spreading “misinformation” and shorting the Waves token even though “no fundamental crisis is evident in the Waves Ecosystem.”
Waves stated in a blog post that “the Waves team replied to the unfounded charges immediately and that since then, certain exchanges have begun to pull back their restrictions.”