A stablecoin that should normally be pegged to $1 USDN, From this value, it lost 9% to $ 0.91. However, the coin partially recovered at the time of this writing and is trading at $ 0.97.
USDN, Waves (WAVES) and leverages the staking model of the Waves protocol’s core consensus algorithm.
The WAVES Altcoin Behind USDN Stablecoin Is Also Falling
According to CoinMarketCap data, WAVES is at $4.68 at the time of writing, with a 7.52% decline in the last 24 hours.
Company founder Sasha Ivanov has previously voiced his concerns about the algorithm:
“We need to work on the algorithm. The current situation was kind of inevitable, it meant testing the whole system.”
With the collapse of the $83 billion Terra and TerraUSD ecosystem in May, stablecoins became a hot topic of the entire cryptocurrency market.
Analysts said the USDN’s support is through WAVES and is currently supported by about 14%, which is experiencing “almost the same scenario as UST”.
Iakov Levin, CEO of crypto yield platform Midas, said in a message:
“About a week ago, the USDN team had improved the mechanics of recapitalizing its reserves with its SURF token purchase. The lower this ratio, the lower the price of the token.”
Levin said that although all purchases with this token add support for USDN, this move creates a similar pattern to the UST as stablecoins rely on a secondary coin to support their stablecoins by providing liquidity. Approaching Ethereum Merge was also cited as a reason for falling liquidity.
Levin continued his statements as follows:
“Everyone is busy preparing for the Ethereum Merge upgrade. Liquidity naturally falls. No one is willing to support another algorithmic stablecoin. This model has potentially dire consequences and the extreme fragility of fixation.”
*Not investment advice.
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