The problem
Currently, USDN staking APR is quite low, which is 0.10% at the time of writing this article. Why is this happening?
In the current implementation, the USDN circulating supply collateral in WAVES is leased to the Neutrino community nodes that generate daily income in WAVES. The generated WAVES are then distributed as follows:
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5% are distributed to the owners of the Neutrino community nodes.
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5% are distributed to USDN stakers.
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45% are transferred to AMM pools stabilization 3PC7DBimauyKytx8tXhKo5u2ECb6FsndYKH contract and then used for buying CRV token, locking it to get vCRV, to be then used for voting for USDN/3-pool on Curve.fi.
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When BR is <= 100%, 45% of the rewards are added to the existing Neutrino reserves. When BR is >100%, 45% of the rewards are distributed to USDN stakers.
The generated amount of WAVES that is intended for USDN stakers is at first swapped to USDN via the Neutrino smart contract and then distributed to USDN stakers.
In other words, most of the rewards are currently not going to USDN stakers but are used for other needs. We suggest changing it.
The Neutrino team is aimed at making USDN staking attractive again. Why is it important? We’d like to give the users of Vires.Finance and the Waves Ecosystem in general, who own USDN, the ability to get passive income, while they are stuck in vires.finance. We want to redirect the entire flow of funds that is currently generated from the Neutrino reserves (except for 5% rewards for the node owners, those remaining the same) to USDN stakers. To reduce USDN peg pressure, the Neutrino team wants to encourage people to stay longer in USDN staking. Besides that, in the nearest future, we’ll improve USDN staking by introducing locking mechanics so that USDN stakers can further boost their APR. However, we’ll discuss further proposals with the community, and they will only be applied if users vote for them.
What do you suggest changing?
The proposal consists of three parts.
1) Redirect funds from AMM pools stabilization to USDN stakers
At the moment the AMM pools stabilization is not working as planned and does not bring the expected results, so we want to reallocate these rewards to USDN staking. 45% of the leasing rewards that are currently being transferred to AMM pools stabilization contract will now be distributed to USDN stakers instead.
Right now 253,000 WAVES ($885,500) have already been accumulated in the AMM pools stabilization fund as you can see on 3PC7DBimauyKytx8tXhKo5u2ECb6FsndYKH contract. These funds will also be used to increase USDN staking APR.
2) Redirect funds that are currently added to Neutrino reserves go to USDN stakers
By increasing profitability, we want to motivate users to keep USDN and stake it, instead of selling it on the market. 45% of the leasing rewards that are currently being added to the existing Neutrino reserves will now be distributed to USDN stakers instead.
3) WAVES generated from leasing are traded to USDN on the exchange
Leasing rewards that are currently being swapped to USDN via the Neutrino smart contract will now be exchanged to USDN on the market instead. This will reduce the number of USDN in the circulating supply, because they are no longer being issued from the contract.