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1/ @NEARProtocol publishes a whitepaper for their stablecoin, $USN.
In this thread, I will summarize the basic mechanism designed by $NEAR.
In this thread, I will summarize the basic mechanism designed by $NEAR.
2/ Base mechanism 1: price-stabilization (NEAR <> USN )
USN is a stablecoin which is backed by crypto collaterals, NEAR tokens.
Base price stabilization module relies on the protocol, where it guarantees 1-to-1 exchange between USN and NEAR in terms of dollar-represented value
USN is a stablecoin which is backed by crypto collaterals, NEAR tokens.
Base price stabilization module relies on the protocol, where it guarantees 1-to-1 exchange between USN and NEAR in terms of dollar-represented value
3/ Base mechanism 1: price-stabilization
Furthermore, the protocol owns and manages curve-like stableswap pool where users can exchange USN and USDT at 1-to-1 ratio. I will call this stableswap module.
Here, the protocol pours its USDT reserves to provide liquidity to the pool.
Furthermore, the protocol owns and manages curve-like stableswap pool where users can exchange USN and USDT at 1-to-1 ratio. I will call this stableswap module.
Here, the protocol pours its USDT reserves to provide liquidity to the pool.
4/ Base mechanism 1: price-stabilization (USDT <> USN swap)
Thanks to the stableswap mechanism, this pool would function as a powerful price stabilizer during normal situations where users can swap USN <> USDT at 1-to-1 ratio at wide range.
Thanks to the stableswap mechanism, this pool would function as a powerful price stabilizer during normal situations where users can swap USN <> USDT at 1-to-1 ratio at wide range.
5/ Base mechanism 2: NEAR-backed collateral
USN protocol aims to maintain 100% collateral ratio for its supply of USN, which means for the circulating amount of USN, protocol needs to own equivalent dollar-nominated value of NEAR in its reserve.
USN protocol aims to maintain 100% collateral ratio for its supply of USN, which means for the circulating amount of USN, protocol needs to own equivalent dollar-nominated value of NEAR in its reserve.
6/ Base mechanism 2: USN reserves
The protocol has two main collateral reserves.
- NEAR reserve: 100% backing circulating USN
- Stablecoin reserve: backing USN during extreme downfall
The protocol has two main collateral reserves.
- NEAR reserve: 100% backing circulating USN
- Stablecoin reserve: backing USN during extreme downfall
7/ Base mechanism 2: NEAR reserve construction
NEAR reserve is replenished by NEAR tokens which come into the reserve as a collateral tokens to mint USN.
NEAR reserve is replenished by NEAR tokens which come into the reserve as a collateral tokens to mint USN.
8/ Base mechanism 2: stablecoin reserve construction
Stablecoin reserve is constructed at the initial phase of the protocol. Furthermore, it can be replenished by the profits from stableswap.
Stablecoin reserve is constructed at the initial phase of the protocol. Furthermore, it can be replenished by the profits from stableswap.
9/ Base mechanism 2: NEAR-backed collateral
Then what should the protocol need to do when NEAR price fluctuates?
- NEAR price falls: buy NEAR with assets in stablecoin reserves and replenish NEAR reserve.
- NEAR price rises: sell surplus NEAR and replenish stablecoin reserve
Then what should the protocol need to do when NEAR price fluctuates?
- NEAR price falls: buy NEAR with assets in stablecoin reserves and replenish NEAR reserve.
- NEAR price rises: sell surplus NEAR and replenish stablecoin reserve
10/ In summary, USN is a crypto asset-collateralized stablecoin which is backed by NEAR tokens accumulated during stablecoin minting.
