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Neutrino USD (USDN) is an algorithmic stablecoin pegged to the US dollar and backed by WAVES. Unlike other fiat-backed stablecoins, Neutrino USD demonstrates a significant difference. The system uses cryptocurrency (WAVES) as a backup. All mechanisms of checks and balances were calibrated so that Neutrino USD would maintain a stable price.
Key Takeaways
Neutrino USD (NUSD) is a stablecoin pegged to the value of the US dollar.
Neutrino Finance issues NSD and built on the Binance Smart Chain.
NSD aims to provide a decentralized and transparent alternative to other stablecoins, which can be backed by a central entity.
The NSD token can act for trading, remittances, and as a store of value.
The NSD token mints and burns based on the market demand.
How does Neutrino USD work?
The Neutrino protocol is an innovative assetization protocol that allows users to create their own stablecoins. These coins can have other cryptos or real-world assets as backing. The protocol achieves this by implementing stablecoin toolkits that allow individuals or institutions to seamlessly build their own algorithmically backed stablecoins.
The Neutrino protocol utilizes smart contracts which execute on the Waves blockchain to ensure optimal efficiency and security. These smart contracts are able to interact with each other as they are written in the same programming language, Ride. Due to the integration of the Waves blockchain in the protocol, the WAVES token holds a significant importance in the Neutrino ecosystem.
The Neutrino system consists of multiple cryptocurrency assets, and USDN is the protocol’s stablecoin, while NSBT is the governance token of the Neutrino protocol.
The Neutrino stablecoin is pegged to the US dollar and said to be backed by the WAVES cryptocurrency.
Neutrino Protocol
Neutrino’s protocol leverages the staking model of the Waves platform to benefit from its underlying consensus algorithm, allowing users to earn yields of up to 15% APY. These yields seem suspiciously high for a coin that maintains a stable peg. More volatile assets are typically higher yield-bearing than assets that are pegged to the USD price.
The Neutrino USD price is pegged to the dollar, but when analyzing the live Neutrino USD price you might notice some minor price fluctuations. These fluctuations are normal and are a result of deviations in the assets backing USDN.
The value of the real-world assets supporting USDN will change based on supply and demand, and the protocol employs smart contracts for every transaction conducted on the network. Smart contracts ensure that USDN’s current price information is accurate and that the protocol maintains transparency and consistency in all transactions involving USDN.
Users seeking to learn more about the protocol’s functionality can refer to the Neutrino whitepaper for a more detailed description.
Neutrino USD Development
Neutrino USD, a stablecoin launched by Waves in 2019, was migrated to the Ethereum network in August 2020 to enhance liquidity and offer more options in the decentralized finance (DeFi) sector. The protocol, which utilizes a unique approach for crop farming on the Ethereum blockchain, gained a market value of over $120 million USDN within its first year and quickly became one of the most popular decentralized apps (dapps) on Waves’ mainnet.
Neutrino developed a decentralized foreign exchange (DeFo) feature, which is an extension of the Neutrino protocol and enables instant exchanges of assets with stable prices tied to popular national currencies or commodities. The DeFo is open-source and other interfaces can integrate it. The goal is creating a seamless connection between traditional fiat and cryptocurrencies.
USDN is one of nine assets Neutrino offers. The others include:
EURN – Neutrino EUR pegged to the Euro;
CNYN – Neutrino CNY pegged to the Chinese yuan;
JPYN – Neutrino JPY pegged to the Japanese yen;
RUBN – Neutrino RUB pegged to the Russian ruble;
UAHN – Neutrino UAH pegged to the Ukrainian hryvnia;
NGNN – Neutrino NGN pegged to the Nigerian naira;
BRLN – Neutrino BRL pegged to the Brazilian real;
GBPN – Neutrino GBP pegged to the British pound;
TRYN – Neutrino TRY pegged to the Turkish lira.
Collapse
In April 2022, USDN experienced a depegging event due to allegations of price manipulation within the WAVES ecosystem. The following month, on May 11, 2022, the stablecoin TerraUSD (UST) experienced a significant decline, reaching as low as $0.023. Despite its intended stability, USDN also experienced a 12% drop to $0.88 on the same day, failing to maintain its target price of $1.
Followed by the downfall of FTX in November 2022, USDN failed to maintain its peg and started collapsing, eventually dropping to a low of 0.23 on 23rd of January.
Neutrino INDEX FAQ
Neutrino INDEX token (USDN/XTN) frequently asked questions.
Who are the founders of USDN?
Neutrino USD was created and maintained by the Waves protocol, established in 2016 by Sasha Ivanov, a Russian tech entrepreneur and CEO of Vostok Project, is a comprehensive cryptocurrency platform that allows users to mine digital currency on its blockchain. It provides a means for users to tokenize various assets, including both cryptocurrencies and fiat currencies, and facilitates the transfer of these assets.
What is the use of USDN?
The Neutrino protocol has three primary tokens: WAVES, USDN, and NSBT. WAVES is for paying transaction fees on the Waves blockchain, and it also serves as collateral for USDN. NSBT is a governance and recapitalization token for the Neutrino protocol, which helps maintain the stability of USDN collateral reserves. Additionally, holders of NSBT have a say in the protocol’s product, feature roadmap, and governance parameters.
All three tokens can be staked for LPoS rewards, the USDN equivalent of the converted LPoS, and smart contract gas costs. Holders of Neutrino USD can stake their assets on the platform for annual yield. On the other hand, traders can purchase NSBT in an open auction and set the price based on their predictions. Traders can profit from price differences if the current market cap rate changes. To gain passive income through mining, Neutrino tokens can be frozen. The highest price paid for USDN was $1.19.