Having its stablecoin is a significant event for many projects, and Near Protocol was no exception. On April 25, 2022, the decentralized platform Decentral Bank officially launched its algorithmic stablecoin named USN for Near Protocol. But, what is USN?
In this article, we are going to answer the most basic questions - what is it, how does it work, and what are the benefits of using this cryptocurrency? Moreover, you will learn more about the future perspectives of the coin and, what is more importantly - how you can buy USN. But let us start from the beginning - what is USN?
USN is the NEAR Protocol’s stablecoin, which is soft pegged to the US Dollar, meaning cryptocurrency has a ratio of one by one to the US Dollar. Nevertheless, USN is not backed by the US Dollar but by USDT cryptocurrency and NEAR coins.
A new decentralized organization Decentral Bank launched this stablecoin for the ecosystem of Near Protocol. Thus, this organization manages USN, including its infrastructure and reserve funds.
The essential purpose of creating the USN token is to support the development and liquidity of the DeFi-ecosystem based on the Near Protocol. The return on the asset will be about 11% per annum, and the exact value will depend on the stacking interest and the value of the assets for collateral.
In May 2022, the crypto world was literally shocked by the case with the Terras’ stablecoin UST and native coin – LUNA, which were suddenly crashed. Starting from this time, many crypto users understood that some stable cryptocurrencies could not be trusted because they could be crushed as well. However, the USN stablecoin developers took this moment into account.
When creating USN Stablecoin, all the advantages of already existing “stable” coins were considered: UST (thanks to the on-chain arbitrage model), FRAX (reliable protection against pegging), and self-balancing reserve. The USN stablecoin is linked to the US Dollar through online arbitrage and a self-balancing reserve fund. Thus, this moment adds credibility to USN while assuring the customers about its reliability.
After giving the answer to the question (what is USN?), it is the right moment to get to know Near Protocol.
Near Protocol is a Proof-of-Stake (PoS) blockchain that was launched in April 2020. This L1 blockchain was created by Alexander Skidanov, a former Microsoft software developer, and Ilya Polosukhin, a former Google engineering manager.
As Near Protocol is based on PoS, it is necessary to highlight the primary advantages of this consensus:
It is worth adding that Near Protocol is a developer-friendly blockchain because its foundation lies in the programming language Rust, which is widely known and used by many developers. And as a result, any app on Near Protocol can be launched in just 5 minutes.
Furthermore, Near Protocol positions itself as one of the most innovative blockchains in terms of scalability. On 4 May 2020, Near Protocol closed its funding round of 21.6 million dollars, in which Andreessen Horowitz (a16z - the largest and most active crypto investment fund in the world) participated mostly. This investment shows that investors saw the potential of the blockchain, and Near Protocol has realized the expectations to the great extent.
The USN coin combines several different cryptocurrency stabilization methods. First, it uses a smart arbitrage contract that allows the exchange of NEAR and USN. This moment allows for the exchange of USN for one dollar worth of NEAR tokens. Arbitrageurs (i.e. market makers) can use the price difference when a USN loses its peg, helping it return to a one-dollar value.
The USN coin is also backed by a reserve fund, which is currently double-collateralized. The collateral is designed to automatically support the stablecoin with a fund that consistently exceeds 100% of all USN (i.e. overcollaterization). So, in extreme cases, the DAO can buy back all USN and stabilize the price.
As mentioned earlier in this article, the primary reason for creating USN is the further and stronger development of the ecosystem of Near Protocol while maintaining its liquidity. On the other hand, we have a massive crash on UST and LUNA. And one more Near USN stablecoin’s purpose is to show that stablecoins can be trusted.
The USN stablecoin developers put a lot of effort into this token and its reliability, so implementing the ideas of on-chain arbitrage and self-balancing reserves gives USN more credibility in terms of maintaining its peg to the US Dollar.
As of mid-2022, USN is available on two different chains - Near and Aurora. We have already given you a general overview of Near, but it is worth shortly explaining what Aurora is.
Aurora is an EVM (Ethereum Virtual Machine) implemented as a smart contract on Near. Thus, it is clear that the ground difference between Near and Aurora lies in that Near is an L1 blockchain, and Aurora is a smart contract on this chain.
In general, there are no significant differences between them - so you can decide for yourself whether to buy USN Near or to buy USN Aurora.
It is worth mentioning that this soft-pegged stablecoin has many advantages, including the following ones:
The decentralized organization Decentral Bank has shared its plans relatively the Near Protocol’s stablecoin USN. The organization divided the development of this cryptocurrency into two stages - USN v1.0 and USN v.2.0.
The first stage entails to make a double collateralization of the USN coin with USDT plus NEAR and realize a possibility of a stable swap between USN and USDT. The ending date was 30 June, 2022.
The second stage involves the second, updated version of the stablecoin and consists of two phases. During the first phase, which was initiated on 30 June, 2022, the stablecoin USN should be backed with USDT with the ratio of 1:1. And the second phase suggests the collateral in both stablecoins and non-stablecoins digital assets (starting with NEAR). One more challenging task (during the second phase) is the improvement of the mechanisms of the crypto and a safety protocol.
After considering all the details related to this newly developed stablecoin, you probably have the last question - how to buy USN cryptocurrency. For sure, you can do it in exchange services that allow you to purchase this token, but there are a few services that can enable this. So, what is the solution?
At Utorg, you can easily buy USN (Near), and the purchasing process will take several minutes of your time (for users who have already made purchases at Utorg, this process will be in a way faster). Here is a guide.
First and foremost, it is mandatory to set up your order. It means that you need to specify the details, like the fiat currency you want to pay with and the amount you want to buy. The total sum of the purchase will be displayed automatically, and this sum will remain the same till the purchasing process is done. And what is more important, the service will request you to provide it with the crypto wallet address, where the crypto will come.
Secondly, it is necessary to process a payment. You have plenty of options on how to do this - it is possible to pay with over 10 of the most popular payment methods, which include Visa, Mastercard, Apple Pay, and Google Pay. What is more, Utorg allows users to buy USN for 27 fiat currencies. Definitely, you will find the most suitable combination for you.
And finally, without KYC verification, any purchase of USN is not possible. So, you need to follow the instructions and get the needed level of KYC. To complete the verification, you need a working web camera and your valid ID card/driving license. The process takes less than 3 minutes, and it is required for new users only. So, if you have already dealt with Utorg, you can skip this step and buy the USN coin quicker.
USN is an innovative stablecoin developed by the decentralized organization Decentral Bank for Near Protocol with several purposes - to increase the liquidity of the Near Protocol’s ecosystem and return the belief of users that stablecoins can be trusted. The beneficial part for regular users lies in cheap and fast transactions and the opportunity of staking the cryptocurrency.
1. What is USN (Near Protocol)?
USN is a stablecoin developed by Decentral Bank, a decentralized organization, for Near Protocol. This stable cryptocurrency is soft pegged to the US Dollar and has an equal ratio with it.
2. Is USN a truly stable cryptocurrency?
Yes! One of the primary ideas of this stablecoin is to provide crypto users with a token that can maintain its peg to the fiat currency (in this case, it is the US Dollar). With the help of on-chain arbitrage and self-balancing reserve, it is easier for this stablecoin to maintain this peg.
3. How can I buy the USN (NEAR) token?
On our website, you can buy USN on Near Protocol with ease. You must go through three elementary steps to complete the work: set up your order, make a payment, and complete KYC verification (for new users only). After doing these steps, USN will be on your Near Wallet.
4. What is USN backed by?
The USN stablecoin is not backed by the US Dollar. However, the NEAR token, as well as USDT cryptocurrency, serves as the collateral for it.