Decentral Bank Launches $USN: a NEAR-native Stablecoin
Decentral Bank announces the launch of its first stablecoin, $USN. $USN is a NEAR-native stablecoin soft-pegged to the US Dollar, backed by a Reserve Fund that contains $NEAR, along with $USDT initially. $USN’s core stability mechanisms consist of on-chain arbitrage and a self-balancing Reserve Fund based on the Currency Board Principle. Combining the growth potential of $UST and the strong peg defense of $FRAX, $USN is positioned to be one of the most effective ways to bootstrap liquidity in the NEAR ecosystem; all while adding a new layer to $NEAR’s utility as a token.
The Decentral Bank DAO manages all the aspects of the Reserve Fund and main smart contract operations. The DAO can also vote to stake the $NEAR part of the Reserve Fund and distribute the staking rewards to the users of the protocols that integrate $USN. At launch, Decentral Bank will receive a grant from Proximity Labs to support the development of $USN.
$USN’s peg to the US Dollar is secured through on-chain arbitrage and a self-balancing Reserve Fund. $USN maintains its peg through a smart contract which allows for the exchange of $NEAR<>$USN with 0 slippage and minimal commissions. As soon as $USN loses its peg, arbitrageurs will exploit the price difference between the on-chain smart contract and the exchanges until $USN returns to its peg.
The $NEAR used to mint $USN goes to the Reserve Fund. The Reserve Fund is based on the Currency Board principle, and automatically balances to maintain a backing of $USN at a rate greater than 100% at all times. Initially, $USN will be double-collateralized by $NEAR and $USDT, the latter of which is pooled on NEAR’s main DEX, Ref Finance, and other CEXs to secure $USN’s peg to the dollar in the open market. The stability design of $USN means that in a worst case scenario, Decentral Bank could buy back the entire amount of $USN ever issued.
Starting today (April 25th), users can mint $USN using $NEAR through the core smart contract via CLI (contract address is “USN”) or third party NEAR wallets like Sender Wallet. Soon, a swap page will also be available on the Decentral Bank website. Users can also swap between $USN and $USDT on Ref Finance’s StableSwap. During this initial bootstrapping phase, Decentral Bank will receive a grant with which the $USN <> $USDT pool on Ref Finance will be seeded.
The Decentral Bank DAO can vote to stake the $NEAR part of the Reserve Fund, meaning $USN will automatically generate yield based on the $NEAR staking rewards. With this decision, $10m+ in rewards will be distributed monthly to $USN holders through lending protocols on NEAR and Aurora (NEAR’s EVM layer), such as Burrow, Aurigami, and Bastion. The exact $USN APY can change depending on the circulating supply and treasury size, but at its lowest it will be equal to NEAR’s staking APY (currently ~11%). The first lenders will likely receive over 20% APY through additional incentive mechanics.
In the near future, users can expect $USN to be integrated on CEXs as well as other chains. After maturation, $USN can also be integrated on the protocol level as a native asset on NEAR, which will be used to pay for gas and storage fees.
What is NEAR?
NEAR Protocol is a proof-of-stake layer 1 blockchain that supports smart contracts in multiple languages via WebAssembly and EVM runtimes. NEAR is designed to be super-fast, incredibly secure, and infinitely scalable. NEAR’s vision is to create a network that enables people to reimagine finance, creativity, and community in new and inclusive ways.
NEAR is built by an award-winning team of engineers and entrepreneurs to be simple to use, inclusive and good for the environment. NEAR is backed by top VCs such as A16Z, Pantera Capital, Electric Capital, Dragonfly Capital, Coinbase Ventures, Blockchain.com, and Baidu Ventures.
What is $USN?
$USN is a NEAR-native stablecoin soft-pegged to the US Dollar, backed by a Reserve Fund that contains $NEAR, as well as $USDT initially. $USN’s core stability mechanisms consist of on-chain arbitrage and the Reserve Fund based on the Currency Board principle. Combining the growth potential of $UST and the strong peg defense of $FRAX, $USN is positioned to be one of the most effective ways to bootstrap liquidity in the NEAR ecosystem; all while adding a new layer to $NEAR’s utility as a token. $USN’s smart contracts and Reserve Fund are managed by the Decentral Bank DAO.
Learn more about $USN and Decentral Bank
Website · Whitepaper · Github
