USDN Will No Longer Exist, Instead Of It Is WIXT Not Be Forced To Peg To $1

Key Points:

• The Waves ecosystem stablecoin USDN will be transformed into the Waves ecosystem index token WIXT, according to Waves ecosystem stablecoin issuer Neutrino.
• WIXT will not be obliged to peg to $1, but it will represent the value of the Waves ecosystem token instead of aiming to reach $1.
• The WIXT technical litepaper will be made available by the Neutrino team around the end of January, and USDN will officially become WIXT by the middle of February.

The Waves ecosystem stablecoin USDN will be transformed into the Waves ecosystem index token WIXT, according to Waves ecosystem stablecoin issuer Neutrino. WIXT will not be obliged to peg to $1, but it will represent the value of the Waves ecosystem token instead of aiming to reach $1.

The WIXT technical litepaper will be made available by the Neutrino team around the end of January, and USDN will officially become WIXT by the middle of February. The inclusion of $15 million in ecosystem tokens as collateral through governance will come after this.

The team acknowledges that the market volatility following recent events, especially the collapse of the FTX empire, has made USDN untenable:

“With the current setup, clearly, USDN can not withstand the unprecedented market volatility. However, the team and community believe USDN can still perform a valuable use case in the Waves ecosystem by pivoting to a different model.”

WIXT will no longer be tied to $1; instead, it will be collateralized by a collection of Waves Ecosystem tokens. WIXT’s value will fluctuate in response to supply and demand as well as, indirectly, the Backing Ratio (BR).

The BR is the total value of all collateralized assets compared to the value of the available supply. In order to reach a 100% BR, WIXT will aim for a price that tends near $1. As the value is not based on the performance of a single asset, it enables greater stability compared to a single-collateral stablecoin.

With the switch to WIXT, SURF (a token created to recapitalize USDN reserves) will continue to serve this purpose. When the BR hits 115%, 10% of the reserves will specifically be automatically changed from SURF to WIXT and used to reimburse consumers.

For SURF purchasers, this opens up an arbitrage chance. Users can issue SURF at the BR’s value, and when it hits 115% (the protocol’s target), staked SURF will be instantly converted to WIXT at whatever the price of WIXT is at that moment.

Thus, since USDN lost its peg, other targets have been set by Waves. In the future, the value of WIXT may change depending on the conversion rate of SURF.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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