Welcome to this post, where we are going to take a look at how Neutrino, the platform with the USDN stablecoin from the Waves network, works.
With the recent popularity of Waves due to its price hike, there have been many people who have started looking at this network, with its launch recently also of USDN, an algorithmic stablecoin based on the Waves network, and which you can get by exchanging Waves for USDN.
One of the main features that have drawn attention to this new stablecoin is the 15% per year you can get for staking with USDN. First, though, let’s take a look at how it works.
What is Neutrino
Neutrino is an algorithmic stable price asetization protocol that acts as an accessible DeFi toolkit. It allows the creation of stablecoins linked to specific real-world assets, such as national currencies or commodities.
DeFiNeutrino USD (USDN) is an algorithmic stablecoin pegged to the US dollar and backed by WAVES. Leveraging the staking model of the underlying consensus algorithm of the Waves protocol, the USDN stake produces a sustainable reward of up to ~ 15% APY. So you won’t always be getting a stable and fixed 15%.
Although the main stablecoin is USDN and the one with the largest market cap, we also find other currencies in stablecoin such as EURN, RUBN, CNYN and so many others. A similar format to what can be seen on the terra network with its stablecoins of different currencies.
The Waves network has a very easy to use interface and seeks to bring cryptocurrencies to everyone in a much more accessible way. By being able to even create an account with an email and password and not using a wallet like metamask, which for new people can be a bit complex. So if you have never seen this network, you can visit their website to understand how easy it can be for new users who are not used to using different networks and wallets.
With the increase in the price of Waves, there have been many people who have started to get interested in this network and at the same time, the demand for USDN has skyrocketed, increasing its market capitalization by double in a very short time. Being a stablecoin, it means that twice as many USDN have been minted or created as were previously in circulation.
The stablecoin is over collateralized with Waves, where you must deposit waves to get USDN and vice versa. As the value of Waves has increased, the collateral on USDN has also increased.
At the end of the post, we are going to look at some speculations and problems USDN may present, which I recommend you look at if you are thinking of buying or using USDN. Since any algorithmic stablecoin has a risk of pegg, or losing its value 1:1 with the dollar. Meaning, if it loses value, and you have USDN you will lose money, as it is not worth $1 per USDN. Although this has not happened to any great extent in the time that USDN has existed. Now though, let’s take a look at how the platform works.
The swap is the main part where we will exchange our WAVES to USDN. As we have already mentioned, to create or mine USDN, users must deposit WAVES as collateral to have a token as collateral to back up the value of USDN and balance its price in case it falls below $1. You can also buy it in the secondary market such as a wave swap or a centralized exchange that has USDN listed such as Kucoin in the USDT/USDN pair.
Here in swap, you can see swap limit. This is the limit you have to mine new USDN to regulate the amount of USDN you have and avoid problems. Simply indicate the amount of Waves you want to exchange for USDN, you will see the amount of USDN you get, and click on swap to USDN. Confirm the transaction in your wallet and you will have USDN in your wallet.
Note that there is currently a limit of 1 swap per day, and an amount that depends on the amount of gNSBT you have in your wallet. Below you can see the swap history in my swaps.
In stake USDN you will not be able to do the staking directly in neutrino, but you will be able to see the different platforms where you can do it. Mainly in waves.exchange, kucoin, mxc, hotbit and some other exchanges. My recommendation if you want to use USDN and staking is to use waves, being the native platform of the cryptocurrency.
KuCoin is another good option, but I have not been able to find in staking the USDN option, so it may not be available in some countries or at some times. The other exchanges I have no experience using them.
On this part, I recommend you take a good look at the information on how you get 15%, and what you can expect. Which is basically by staking USDN on their network to validate transactions. And for contributing tokens to the validators, you get rewards for helping to keep the Waves network secure. Although this 15% is variable, and will depend a lot on the price of WAVES, although you get USDN as a reward for staking USDN.
In its documentation you can find more information about USDN, how the price is stabilized and the different mechanics it has to avoid losing its value of 1$.
Here you can staking NSBT, which is the token of the neutrino platform. Staking NSBT allows you to vote in the protocol and thus contribute with your vote to the community and platform behind USDN.
In addition, by staking USDN, you will receive gNSBT, which is the USDN liquid staking token. Actually with gNSBT what it allows you to do is to be able to use a higher amount in the swap. As we have seen in the swap, the exchange from Waves to USDN and vice versa has a daily and quantity limit. With gNSBT you can increase the amount you can swap from Waves to USDN or vice versa. It is a way to encourage users to buy NSBT and give a greater utility to the native token of the protocol, besides being able to participate in the voting of new proposals.
Finally, in governance you will be able to vote and see the new proposals in the protocol to modify or change certain aspects. You will be able to vote if you have staked NSBT within the platform.
As we have mentioned before, USDN is an algorithmic stablecoin, and you have to be aware of the risks that this type of stablecoins have. Where they can lose their $1 value if the mechanisms and systems to maintain their $1 value fail. Below, you can find a twitter thread where USDN is analyzed and the problems it can present. If you don’t have experience with DEFI it can be a bit complex, but I recommend reading it if you plan to or already own USDN.
WAVES is the biggest ponzi in crypto— 0xHamZ (@0xHamz) March 31, 2022
It has recklessly engineered price spikes by borrowing USDC at 35% to buy its own token
Continuous WAVES market cap growth is needed to keep the system stable
WAVES will eventually crash and USDN will break with it
You're on notice🧵
I hope it has helped you to know in more detail how USDN works and the main aspects about this stablecoin that has exploded in popularity recently. Remember, if you don’t have an account with binance, you can create one just below.