Thread by @NEAR_daily

Witnessing the collapse of a financial giant @terra_money when hit by a death spinral caused $UST to lose its peg and $LUNA to drop 97% it value, making #Lunacrash the top 1 trending search

What will the $USN of @NEARProtocol do if the market loses confidence in the stable coin?

@terra_money @NEARProtocol 1/ The article is referenced from: decentral-bank.finance 👈

Here is the mechanism of $USN on #NEAR to avoid negative market impact 👇

@terra_money @NEARProtocol 2/ The stablecoin $USN is OVERCOLLATERALIZED. $USN combines on-chain arbitrage with a Reserve Fund that is DOUBLE-collaterized with $NEAR & $USDT to begin with. 🤑

In the worst-case situation, the @DcntrlBank may purchase back all of the $USN ever issued.

@terra_money @NEARProtocol @DcntrlBank 3/ How does the $USN stay stable? (1)

Collaterization excess
$USN is first double-collaterized with $NEAR and $USDT. The value of the collateral will always be more than the total circulating quantity of $USN, even if $NEAR crashes. 🤑

@terra_money @NEARProtocol @DcntrlBank 4/ How does the $USN stay stable? (2)

Reserve Fund Rebalancing is Automatic
To maintain a 100%+ collaterization rate, the Reserve Fund automatically rebalances excess $NEAR in reserve with stablecoins like $USDT.

@terra_money @NEARProtocol @DcntrlBank 5/ How does the $USN stay stable? (3)

Collateral Strategy for Conservatives
Only battel-tested stablecoins, such as $USDT, are used to collaterize $USN. Decentral Bank deposits these stablecoins into stableswaps to maintain the stability of the $USN in the open market. 😋

@terra_money @NEARProtocol @DcntrlBank 6/ By learning the amazing mechanics available from previous stable-coins and cleverly added mechanics, $USN was designed with both growth and stability as equal priorities. Decentral Bank will continue to support this goal.

#NEAR #Bullish #Moon #Web3 #Aurora