NEAR Protocol’s USN Stablecoin Goes Live

The decentralized stablecoin, called USN, was launched on the NEAR Protocol mainnet today, led by the Decentral Bank DAO. 

Another Stablecoin Joins NEAR Ecosystem

The news of the launch was announced in a statement by NEAR’s DeFi arm, Proximity Labs, confirming a prior report that the stablecoin was in development. While the NEAR Protocol is a scalable Layer 1 blockchain, the USN is a decentralized stablecoin that is soft-pegged to the dollar but does not hold cash reserves. Basically, it functions similar to TerraUSD (UST) and Frax Finance (FRAX). To mint the USN stablecoin, users need to deposit NEAR tokens as collateral. 

DAO-Led Stablecoin 

The DAO in charge of the USN stablecoin is the Decentral Bank, which is working in tandem with Proximity Labs. The DAO earns revenue of 11% by staking NEAR tokens with security validators. 10% of this annual revenue will be paid via USN. Therefore the actual USN yield will vary according to the NEAR staking percentage and the market value of the tokens. In fact, ‘first lenders’ could rake in much more through incentives. 

The Decentral Bank DAO is planning to assist the stablecoin through an arbitrage system to ensure that USN trades around $1 worth of NEAR tokens. The DAO is also putting forth a reserve fund with an undecided amount of NEAR and USDT tokens owned by the DAO treasury. 

NEAR Protocol x Terra (UST) 

The NEAR Protocol has been partnering with other stablecoins and integrating them on its platform. Back in November 2021, the NEAR team announced that it was working with Terra to integrate its UST Stablecoin on NEAR and Aurora. The integration was born out of a partnership between leading DeFi protocols Rose and NearPad, and Terra. This integration allows users to bridge assets directly from Terra to Aurora by using Allbridge. Additionally, incentives will also open up to allow users to directly deposit UST liquidity into the protocols to be accessed by the NEAR and Aurora communities. 

Crypto Investors Flock To NEAR

The protocol has also been successfully raising capital through multiple consecutive funding rounds that have attracted many crypto-native investors. Earlier in April, it raised $350 million of investment in its latest round, led by US-based investment company Tiger Global. It also saw contributions from Republic Capital, FTX Ventures, Hashed, and Dragonfly Capital. The goal of the protocol is rapid decentralization of the NEAR ecosystem, a mission that the crypto investment market is more than happy to support. The team had previously raised $150 million in a private token sale held just four months ago, with participation from Su Zhu’s Three Arrows Capita, Mechanism Capital, Dragonfly Capital, Andreessen Horowitz (a16z), Jump, Alameda, Zee Prime, and Amber Group.  

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.