USN wind down — message to all USN holders and community
We all know that stable coins are essential for any crypto ecosystem to thrive and grow — NEAR is no exception. USN was launched back in April 2022 when no stable coins were natively available within the NEAR ecosystem.
First iteration of USN was partially algorithmic — this was a huge learning curve for the DCB team and the USN project in general. Risks of under collateralization became especially clear and USN was quickly adapted — transition to USN v.2 was made — minting of USN was allowed for USDT only starting June 2022.
However in spring 2022 risk of under collateralization did in fact materialize, resulting in a collateral gap or shortfall of approximately $10M growing to $21M as of now, considering that ~5M NEAR were left in the reserves and kept falling in price.
USN has faced many headwinds over the last few months with increased regulatory focus, and changes in market perception from recent high profile incidents. As a result of these issues, we have taken the difficult decision to wind down the USN project in a controlled and responsible manner in a way that ensures USN holders are protected.
DCB together with White Knight Protection (a subsidiary of Aurora Labs), funded by a NEAR Foundation grant, is now starting USN Protection Programme and stating that USN is now fully collateralized (in fact, it is over collateralized given the NEAR DCB holds in its treasury).
More information on the USN Protection Programme can be found on Aurora’s website https://usnpp.auroralabs.dev/.
To ensure that the USN Protection Programme begins, minting of new USN has been permanently stopped. We have also removed liquidity managed by DCB from pool #3020 on Ref.finance, destroying over 40M USN as well.
Current state of USN reserves are as follows:
~38.9M USDT
~5.7M $NEAR (which is still affected by the value of $NEAR token) — current value at time of this announcement is $16.75M USD ($2.96)
We will be working with Proximity and Aurora to donate the approximately 5.7M $NEAR held in the USN treasury to the NEAR community. The NEAR community will have the sole discretion to decide how these funds are used.
We recommend that USN holders redeem their USN through the USN Protection Programme https://usnpp.auroralabs.dev/ as well as the main swap tool https://swap.decentral-bank.finance/ or exchange their USN via any other available route.
The DCB team would like to apologize to the entire NEAR community for this regrettable event. The team has worked incredibly hard to self-rectify this issue but were unable to. We are grateful to the NEAR Foundation, Aurora and wider community for their support in best protecting our users.
