As we all know, USDN has depegged. I am new to the Waves community and I have been busy trying to fix this situation behind the scenes, so pardon me if my ideas are not fully formed.
There is a governance vote happening right now to increase max swap for NSBT holders to make it easier to arb the peg back to $1. I support this proposal but want to propose a stronger measure.
I propose that we eliminate the NSBT staking requirement to use the swap function when USDN price is < $0.97.
This parameter of $0.97 can be changed with community input but I feel that this is necessary for USDN to repeg quickly. Right now it is not economical for new arbitrageurs to enter due to lack of NSBT liquidity and high prices. The longer USDN is depegged, the lower community confidence becomes.
I know this may be controversial to NSBT holders but I think the long term health of the protocol is more important than any “Moon Factor” or measures to limit supply of NSBT. We can discuss changes to max swap and the bonding curve in parallel, but I feel my proposal is necessary to restore the peg fast. Also NSBT stakers would still receive massive fees from arbitrageurs rushing in when the condition I describe is met. They will have a monopoly on swaps when the condition is not met as usual.
Removing the NSBT requirement when USDN price is below a certain level is technically complex according to Neutrino developers. As a temporary and fast solution we can fork the existing swap contract and use a placeholder token, say USDN-A. We can guarantee redemption of USDN-A for USDN at a later time and back USDN-A with reserves to ensure confidence. We can calculate the maximum supply of USDN-A and the reserves based on the amount of collateral or bidding needed to restore the peg across major markets.
Another simpler workaround is setting NSBT stake requirement to 1 token and having no max swap. I am not sure this is technically feasible.
What does the community say to this proposal?