Multi-collateral USDN + soft peg

The Problem

USDN is depegged and can no longer be treated as a stablecoin with hard peg, while the Neutrino protocol arbitrage mechanics does not work.

On December 22 the Neutrino team together with the other Waves ecosystem developers suggested Resolution plan that involves the implementation of the multi-collateral system.
We need to confirm that the community approves the plan.

What do you suggest to change?

1. Make USDN a multi-collateral token with a soft peg.

USDN will now be backed not only with WAVES, but also with other Waves ecosystem tokens: WX, VIRES, SWOP, EGG, and WEST.

The Waves ecosystem teams (WX, VIRES, SWOP, EGG, and WEST) will donate $15 million in total of every project’s token directly to the Neutrino backing.

Later on, it will be possible to add other ecosystem tokens in the collateral via voting.

2. Reactivate USDN->WAVES swaps to incentivize users to burn USDN.

Instead of redeeming WAVES (or WAVES and SURF), USDN->WAVES swaps will now redeem the equivalent amount in all the tokens (and in the same proportion) that the collateral currently has. NSBT/SURF stakers will be getting rewards not only in WAVES or USDN, but also in all the collateral tokens.


:warning: Please note that the values in the following example are for reference only.

The USDN multi-collateral reserve is a set of multiple tokens with the total price that equals 11,210,800 WAVES.

A user swaps 100,000 USDN-> multi-collateral and gets a set of all the collateral tokens in the same proportion as they are in the collateral.

See the following Google Excel Example for more details.

None of the current ideas have a long term positive effect. The newly added tokens will be drained for the equivalent of USDN reduction, which will be less than 15 million dollars, because as the tokens are being sold, the prices will go down.
Repegging USDN with +65% Waves ecosystem tokens will be a lot less effective, compared to WAVES:
Swap USDN >
for basket of tokens >
sell Waves ecosystem tokens for USDN >
sell USDN for WAVES or USDT/C. This step causes depeg.

I expected the new plan would include a treasury, which would help the peg and BR. This treasury wouldn’t be part of the collateral. For example:
USDT in Vires lending >
profits add single token to LP WX AMM WAVES/USDT >
profits add single token to LP WX AMM USDT/USDN.

This will create constantly growing buy pressure to WAVES and USDN, good for peg and BR.
USDT can be replaced with any top tier token outside of Waves ecosystem, such as BTC, ETH, USDC.

It’s my belief that you can’t restore the peg and BR for the long term by selling WAVES, USDN or any other Waves ecosystem token.

My 2 wavelets.


Index needs buyback and burn mechanics. My idea is to stop USDN staking while we have low BR or bad debt and use staking revenue for buyback and burn egg,swop,west, vires tokens (not waves and wx ). Because without such support mechanics index would be drained in short time

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Isn’t this will make collateral price lower? Because people will swap it, and then dump in the market?
I think this is why even USDN has no impact to waves, but when people have no confidence in the token/project, they’ll start to sell things even at loss.

I just worry this idea will damage the token price in it’s collateral, and further damage the whole ecosystem of waves.


One more idea to check - what if swaps waves - > usdn would not print new usdn but take it from vires bad debt while br is low

What is soft peg means? Sasha said it will be around $1 (above or below). I think team should release a paper related to this, explaining exactly what is soft-peg means, and how it works, and is this will save the SURF investor.

My thoughts:

  • Basically all promoted collateral tokens can be staked, so it definitely should be staked to make BR always increasing. That gives better chances to reach BR 1.0 and $1 in some very distant future.
  • Where is some BTC and ETH as part of collateral? And some other stables in the basket?
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