USN launched in mid-April 2022, the time when algorithmic stablecoins created a craze in the world. The price of NEAR at that time surged thanks to the launch of a native algorithmic stablecoin.
USN, at the time of launch, was an algorithmic stablecoin backed by NEAR and delivered roughly 10% annual yield from Decentral Bank. However, after the collapse of LUNA-UST, Decentral Bank in June 2022 announced to pause the use of NEAR tokens for the minting of USN. USN was originally built similarly to TerraUSD (UST) so they are concerned that stablecoins built in the same way would suffer similar fates. Since then, the stablecoin will exclusively be minted with USD Tether (USDT), the largest centralized stablecoin issued by Tether. This means that USN will be 1:1 collateralized and redeemed with USDT, rather than NEAR, the native token of the Near Protocol blockchain as originally decided.
Even so, the remaining 5.7 million NEAR tokens in the USN’s Reserve Fund continued to plunge, resulting in the spread involving NEAR holdings and USN issued now to reach $21 million. In addition, legal actions targeting algorithmic stablecoins, as well as the total supply of USN reaching 10 trillion are also the reasons why Decentral Bank decided to shut down the project.
For now, Decentral Bank is still working as usual, only disabling the USN’s minting mechanism. The closing process will take place gradually until the user withdraws and converts all USN to USDT. Decentral Bank said that it had informed the NEAR Foundation and the NEAR Protocol management organization has also agreed to spend 40 million USDT for NEAR holders to convert USN to USDT. This campaign is called “USN Protection Programme”, implemented in collaboration with Aurora.
To redeem USN, users need to visit Aurora’s website, connect a wallet holding USN, complete KYC and convert USN to USDT. In addition, users can also directly swap USN for USDT on Decentral Bank or Ref.finance.
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