Waves blockchain platform founder and CEO Sasha Ivanov has announced plans to launch a new stablecoin. Sasha Ivanov made the revelation in a Twitter post on Tuesday, December 20 announcing the new development, before proceeding to address the crisis of the Waves-backed stablecoin, Neutrino USD (USDN), and disclose a situation resolution plan for it.
– I will launch a new stable coin
– There’s gonna be a $USDN situation resolution plan set in motion before.
— Sasha.waves (@sasha35625) December 20, 2022
Ivanov also revealed that the new stablecoin will be undepeggable as a follow-up tweet to concerns that “stablecoins to depeg is not the answer.”
Speaking to a news site, Ivanov explained that the new stablecoin will be a “hybrid between an algorithmic stablecoin” and will be based on the decentralized autonomous organization (DAO) model. He also added that “It will be implemented using an approach that is native to Waves and cannot be implemented on other chains.”
Excerpts from Ivanov’s Twitter conversation read:
“I will launch a new stablecoin…There is going to be a USDN situation resolution plan set in motion before…Nothing new will be launched or announced until the USDN plan resolution is set in motion…The stablecoin will be undepegable…SURF and NSBT will remain functional.”
Waves is a Blockchain platform developed to provide users with the opportunity of creating their own new custom tokens. Those tokens may be used for loyalty programs, in-app currency creation, and ICO funding.
Wave Founder Addresses The USDN Crash
The Waves founder also addressed the crash of Neutrino USD (USDN), an algorithmic crypto-collateralized stablecoin pegged to the United States dollar and backed by Waves.
Waves’ USDN stablecoin has been struggling to maintain its 1:1 peg and has lost the peg several times in 2022. The first major crash took place in early April 2022, when the stablecoin tumbled to $0.8. After the USDN crash, the token subsequently lost its peg multiple times, with the latest crash bringing USDN down to $0.53. As of the time of writing, one USDN token is worth $0.58 based on CoinGecko data.
On this issue, Ivanov insisted that nothing new will be launched or announced until the USDN resolution plan is rolled out, adding that the plan will be wholistic not just for the USDN, but also to enable vesting.
Among the biggest reasons Ivanov cited for the USDN crash, is that the existing USDN model is not attuned to the current market conditions. In this regard, the Waves founder said that more robust models ought to be developed.
In his explanation, Ivanov referred to USDN as an “incentives-based stablecoin” stating:
“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.”
Despite the limitations of the USDN, Waves does not intend to abandon the stablecoin, with the CEO assuring of his commitment to stabilizing USDN and leveraging the new stablecoin to restore the former’s value.”
“USDN will not be completely phased out; we’re absolutely committed to stabilizing USDN and the new stablecoin should actually help USDN to restore its value.”
Ivanov also opined that the over-collateralization and adaptive algorithms should help create “undepeggable assets.”
WAVES Crypto Affected by the South Korean Crypto Exchange Authority
The news of a new stablecoin and plans to upholster the Neutrino USD comes amid turbulent times for the Waves crypto, which has witnessed a significant price drop associated with the South Korean cryptocurrency exchange authority.
The South Korean crypto exchange authority, a Digital Asset eXchange Alliance (DAXA), issued a warning against WAVES on December 8, 2022, causing the crypto to lose up to 30% of its value.
The warning came after the WAVES-backed stablecoin USDN depegged and therefore, failed to reestablish the $1 peg in more than 180 days. This placed the USDN protocol on the brink of liquidating WAVES through an automatic arbitrage process in an attempt to regain the peg. On December 8, USDN was trading 16% below the peg.
As of press time, WAVES crypto is trading at $1.57, down by 15.9% in the last seven days and 37.5% in the last two weeks, according to data on CoinGecko.
Subsequently, Waves attributed the value drop to “misinformation” spread by some centralized exchanges (CEXs), which have been shorting the WAVES token in the absence of any “fundamental distress being present in the Waves Ecosystem.”
In a blog post, Wave noted that the Waves team had responded to the unfounded allegations quickly and sternly, causing some exchanges to start retracting the restrictions they had placed against the Waves token.
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