- Waves’ stablecoin USDN has lost its $1 peg.
- Others have called out the platform, saying that it is the “next LUNA” in the making.
- However, one of the founders claims that Waves will not repeat the mistake of Terraform Labs.
The ordeal of stablecoins appears to be far from over, as Waves’ own algorithmic stablecoin USDN has lost its $1 peg. At the time of writing, each USDN is worth $0.52.
The incident has raised the alarm of many people, who expressed worries about the project’s stability. Someone even said Waves is the “next LUNA” in the making.
To this retweet, Waves Founder Sasha Ivanov replied, saying that it will not happen. However, an earlier tweet said that Waves will issue another version of its stablecoin. This is precisely what happened with Terra USD (UST), which is now TerraUSD Classic (USTC). Consequently, this narrative caused many to remember what happened to Terra and Do Kwon.
At the time of writing, each USTC is worth $0.020.
Meanwhile, in response to the clamor, Ivanov explained that the new stablecoin will be more “attuned to the current market conditions.”
Waves is a blockchain network that uses the Proof-of-Stake (PoS) protocol. It has its own ecosystem that composes mainly of a decentralized exchange and crypto wallet. In addition, developers can deploy their own smart contracts and decentralized applications (DApps).
Meanwhile, an algorithmic stablecoin is different from leading stablecoins today like Tether USD (USDT) or Circle USD (USDC). The two stablecoins claim to be backed by US dollar reserves in a 1:1 ratio.
On the other hand, algorithmic stablecoins are not backed by such assets. Instead, they are backed by a highly complex algorithm that works alongside the protocol’s native asset.
