Waves CEO and founder Sasha Ivanov announced that his new stablecoin will 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 crisis resolution plan set in action before.”
He emphasized that until the USDN plan resolution is put into motion, nothing new would be introduced or disclosed. The stablecoin will be “undepeggable,” according to Ivanov’s guarantee.
The new stablecoin will be a “hybrid between an algorithmic stablecoin,” according to Ivanov, and it will be built on the decentralized autonomous organization paradigm. He said that it will be accomplished using a method that was unique to Waves and could not be applied to other chains.
Ivanov said that more reliable models should be created and that one of the main causes of the USDN fall is that the existing USDN model is not adjusted to the current market circumstances. He called USDN an “incentives-based stablecoin” and said:
“Unfortunately incentive based models do not account for black swan events, they work in 99.9% of market conditions but are not able to withstand very heavy market volatility.”
Waves do not intend to give up on USDN in spite of its flaws. The new stablecoin should actually enable USDN to regain its value, according to Ivanov, who added that “USDN will not be fully phased out.” He added that “we are absolutely 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 that is 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 saw 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 coin is now worth $0.58.
The announcement coincides with a sharp decline in the value 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 limitations.”