Near Protocol developers have launched an algorithmic stablecoin, USN, pegged to the US dollar and backed by the native NEAR token. The DAO will be managed by the Central Bank.

Meet $USNThe first NEAR-local fixed currency of the Central Bank!

From today users mint $USN using $CLOSE Via NEAR web wallet (https://t.co/Kc7Tr4M7B8). Users can also switch between $USN and $USDT over @finance_refStableSwap. pic.twitter.com/ZacQNGaTOV

— Central Bank (@DcntrlBank) 25 April 2022

Fixing the rate will also be provided by the reserve fund from NEAR and USDT. Its size will be determined in the future.

Users can exchange USN to USDT on Ref Finance platform.

Rumors about the upcoming launch of the icon surfaced on April 4. Later, one of the users mentioned a token in the interface of the Ref Finance protocol with the corresponding ticker.

USN is similar in working mechanism to TerraUSD (UST), Frax Finance (FRAX), USDB and USDD.

The stablecoin will help raise additional liquidity for projects operating in the DeFi ecosystem such as Ref Finance, Burrow, Aurigami, and Bastion.

The proceeds from staking NEAR in the Central Bank’s reserve fund will provide USN holders with a minimum one-year return. It is currently ~11% per year.

🏦What is the Central Bank?

managing the DAO $USN Reserve Fund and main smart contract transactions. DAO can vote for stock $CLOSE from the Reserve Fund, that is $USN CLOSE will automatically generate returns based on betting rewards. Thus, the minimum $USN yield = NEAR stake APY (~11%).

— Central Bank (@DcntrlBank) 25 April 2022

APY may vary according to the volume of issuance and the size of the reserve. Initial participants will likely be able to count on 20% or more per year. The increase in the indicator will be provided by monthly payments with protocols of descent from the ecosystem after voting by DAO participants.

🤔 $USN surrender?

Through DAO voting, more than $10 million in rewards will be distributed monthly through lending protocols such as: @burrowcash @aurigami_PLY @BastionProtocol. Although the APY may vary depending on the circulating supply and the size of the Reserve Fund, initial lenders will likely receive 20% + APY.

— Central Bank (@DcntrlBank) 25 April 2022

The price of NEAR has increased by 8% in the last 24 hours, according to CoinGecko. This is the third result in the top 20 after Dogecoin (+29.1%) and Terra (+8.4%).

Recall that in March 2021, Do Kwon accepted the $11 million challenge from users who questioned the stability of the LUNA price, which ensures the stability of the UST.

By mid-April, the UST-affiliated nonprofit Luna Foundation Guard had $2.44 billion in reserves, 70% of which was bitcoin. The rest is in USDT, USDC and LUNA.

Previously, UST outperformed Binance USD in terms of market cap.