NEAR Foundation Urges Wind-Down of USN Stablecoin, Sets Aside $40M
The NEAR Foundation, an organization supporting the blockchain of the same name, urged the wind-down of the USN stablecoin and announced it's setting aside $40 million aside to fund a "USN Protection Programme."
USN is a NEAR-native stablecoin, which was created and launched by Decentral Bank (DCB) on in April, according to a statement from the NEAR Foundation on Monday.
The foundation said USN is an independently operated community run project which had no direct financial assistance from the NEAR Foundation.
According to the statement from the NEAR Foundation, DCB recently contacted the NEAR Foundation to advise it that USN had become undercollateralized due to it originally being an algorithmic stablecoin, susceptible to undercollateralization during extreme market conditions.
"The NEAR Foundation is recommending that USN should wind down. The Foundation encourages DCB to do this at the earliest opportunity in a responsible and professional manner that protects all of its users," NEAR wrote.
In order to protect users and to facilitate the winding down of USN by DCB, the NEAR Foundation has elected to set aside $40 million, according to the statement. This will be available via a grant for the creation of the "USN Protection Programme."
"With the USN Protection Programme, NEAR Foundation understands that USN is now overcollateralized, as there is also approximately 5.7 million $NEAR tokens in the DCB treasury, which the foundation expects DCB to donate to the NEAR community," according to the statement.