Sascha Ivanov, founder and CEO of blockchain platform Waves, wants to release a new stablecoin. The current stablecoin Waves Neutrino USD (USDN) is currently in crisis.
On December 20, Ivanov tweeted a plan to resolve the USDN situation and leave a new stablecoin project at the same time.
“I’m going to release a new stablecoin,” the founder of Waves said. He added that there will be a “plan to resolve the USDN situation that will be put in place beforehand.” He stress, nothing new will be initiated or announced until the decision on the USDN plan takes effect. Ivanov promised moreover, the stablecoin will be “unlockable”.
Ivanov told Cointelegraph that the new stablecoin will be a “hybrid between an algorithmic stablecoin” and based on a decentralized autonomous organization. “It will be implemented using a unique approach to Waves and cannot be implemented on other channels,” the founder continued.
According to Ivanov, one of the main reasons for the USDN crash is that the current USDN model is not suitable for current market conditions. He added that more robust models should be developed. He called the USDN an “incentive stablecoin”:
“Unfortunately, incentive-based models don’t account for black swans, they work in 99.9% of market conditions but are unable to withstand very large market swings.”
Despite USDN’s shortcomings, Waves has no plans to abandon the stablecoin. “USDN will not be completely phased out, we are fully committed to stabilizing USDN and the new stablecoin should help USDN restore its value,” Ivanov said. The CEO added that overscaling and adaptive algorithms should help create “assets without decoupling”.
Neutrino USD is an algorithmic crypto stablecoin pegged to the US dollar and funded by Waves. The USDN stablecoin is struggling to maintain its 1:1 peg and has lost it multiple times in 2022.
The first major USDN crash occurred in early April 2022 when the stablecoin fell to $0.8. Since then, the token has lost its pairing several times. In the last drop, the USDN went down to $0.53. At press time, USDN is trading at $0.58, according to CoinGecko.
Cryptocurrency Waves (WAVES) is currently experiencing a significant price drop as South Korea’s crypto exchange regulator, the Digital Asset eXchange Alliance (DAXA), issued a warning on WAVES on December 8. According to CoinGecko, WAVES is down around 30% since DAXA issued the alert.
waves spoke responded to “misinformation” spread by some centralized exchanges that shorted the Waves token despite “there is no fundamental distress in the Waves ecosystem”.
“The Waves team was quick to respond to the baseless allegations and since then some exchanges have begun lifting their restrictions,” Waves said in a blog post.