Will $WAVES go to zero as $USDN depegs below $0.6 for more than a week with no sign of it coming back. Neutrino USD (USDN), which was in the Top 60 just last week and once had a $1B market cap, has depegged from $0.95 to $0.60 over the past week
It is an algorithmic stablecoin collateralized by the WAVES token, which fell from a market cap of $6B in March 2022 to $700M after the collapse of UST, all the way down to $170M now. WAVES market cap has been below USDN market cap since June 2022, so it’s no surprise that USDN depegged without its collateralized backing.
What is surprising is that it’s still in the Top 75 by market cap.
Unlike Terra’s UST, USDN didn’t immediately collapse once the collateralization ratio fell below 1. That’s mainly because of the complicated system Neutrino Protocol used that requires owners to hold NSBT and SURF tokens to swap USDN for WAVES, and the lack of liquidity to exit. It took 6 months before it collapsed.
Neutrino USD is similar to Tron’s USDD: overcollateralized but with little liquidity to exit. I’m betting that USDD will also eventually collapse, as its collateralization ratio keeps falling, too — but that will take much longer!
USDN Depegs, Panic Sell or Hold Greed
$USDN Waves founder Sasha Ivanov is issuing a statement affirming that the Waves ecosystem is fully functional, and decentralized and is not threatened by the depeg of the USDN stablecoin. But then, USDN keeps de-pegging more and more over the week without a sign of bouncing back.
Will you panic and sell, or hold hoping it will bounce back?
$USDN is backed by $WAVES according to its whitepaper. It also cites that they can sell $WAVES with a more centralized approach if needed for $USDN. Be extremely careful and approach with caution the people who hide the fact that $USDN and $WAVES are very similar to $UST and $LUNA.
About Neutrino USD
Neutrino USD (USDN) is an algorithmic crypto-collateralized stablecoin pegged to the US dollar. All operations involving USDN, such as issuance, collateralization, staking, and reward payouts, are transparent and governed by a smart contract.