Days after the USDN lost its peg to the USD, Waves CEO and founder Sasha Ivanov promised that his new stablecoin would be “unassailable”.
Sasha Ivanov, founder and CEO of the blockchain platform Waves, plans to launch a new stablecoin amid the current crisis of the stablecoin backed by Waves Neutrino USD (USDN).
Ivanov took to Twitter on December 20 to announce the plan to resolve the USDN situation as well as a new stablecoin project.
“I will be launching a new stablecoin,” the Waves founder wrote, adding that there will be a “USDN situation resolution plan that will be put in place beforehand.” He stressed that nothing new will be initiated or announced until the resolution of the USDN plan is underway. Ivanov also promised that the stablecoin would be inseparable.
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 is implemented using a native Waves approach and cannot be implemented on other channels,” he noted.
One of the main reasons for the USDN crash is that the current USDN model is not aligned with current market conditions, Ivanov said, adding that more robust models should be developed. Referring to USDN as an “incentive-based stablecoin”, he said:
“Unfortunately, incentive-based models do not account for black swan events, they work in 99.9% of market conditions but are unable to withstand very high market volatility.”
Despite USDN’s imperfections, Waves has no intention of abandoning the stablecoin. “USDN will not be completely phased out, we are absolutely committed to stabilizing USDN and the new stablecoin should actually help USDN restore its value,” Ivanov said. The CEO added that over-provisioning and adaptive algorithms should help create “undetachable assets”.
Stay safe in Web3. Learn more about Web3 Antivirus →
Neutrino USD is an algorithmic crypto stablecoin pegged to the US dollar and backed by Waves. The USDN stablecoin struggled to maintain its 1:1 peg and lost the peg several times in 2022.
The USDN experienced its first major crash in early April 2022 when the stablecoin fell to $0.8. The tok has lost its peg several times since then, with the recent crash taking the USDN down to $0.53. At the time of writing, one USDN token is worth $0.58 according to CoinGecko.
Neutrino USD (USDN) annual chart. Source: CoinGecko
The message comes in the midst of the waves
The cryptocurrency saw a significant drop in price as South Korean crypto exchange regulator Digital Asset eXchange Alliance (DAXA) issued a warning on WAVES on December 8. According to data from CoinGecko, WAVES has lost around 30% of its value since DAXA issued the alert.
Related: Japan advises against algorithmic support in stablecoins
Waves went on to point out the “misinformation” spread by some centralized exchanges that shorted the Waves token, despite the fact that “there is no underlying distress in the Waves ecosystem.”
“The Waves team was quick to respond to the baseless allegations, and since then a number of exchanges have begun rolling back their restrictions,” Waves noted in a blog post.