near The Near Foundation, the institution behind its blockchain, USN stablecoin and announced that it has set aside $40 million to fund a program called the “USN Protection Program”.
USN is a Near-based stablecoin created and launched by Decentral Bank (DCB) in April, according to the Near Foundation on Monday.
“NEAR’s Stablecoin USN Unsecured, Should Be Closed”
The foundation said USN is an independently operated community project and does not receive direct financial assistance from the Near Foundation.
According to the statement, DCB recently contacted the Near Foundation to report that the USN has become unsecured, which is “inherent” for algorithmic stablecoins, especially in “extreme market conditions.”
According to the foundation, DCB also confirmed that the USN coin has been double-printed, which contributes to under-collateralization.
In its article on the subject, the foundation said:
“The Near Foundation recommends that the USN be shut down. The Foundation encourages DCB to do this as soon as possible in a responsible and professional manner that protects all of its users.”
According to the statement, the Near Foundation has decided to set aside $40 million to protect users and facilitate the liquidation of USN by DCB. This money will be provided through a grant for the establishment of the “USN Conservation Programme”.
The foundation continued its statement on the subject as follows:
“With the USN Conservation Program, the Near Foundation will know that USN is now over-collateralized, as the DCB treasury also contains approximately 5.7 million NEAR altcoins that the foundation expects DCB to donate to the Near community.”
Marieke Flament, CEO of The Near Foundation, said in an interview that her organization is focused on being transparent and communicating with the community about what happened:
“Cryptocurrency We are in a regulatory environment where the space is notoriously bad and everything stablecoin has a similar reputation. It’s about working on that and demonstrating our transparency values and making sure users are protected.”
Flament said he is confident this type of intervention will not be needed in the future as the ecosystem grows and matures and with new hires. “As an ecosystem, we can learn from this and prevent it in the future,” Flament said.
*Not investment advice.
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