NEAR, the native token of the Near Protocol, rose today after the Near Protocol blockchain launched its long-awaited stablecoin, USN.
At the time of writing, the NEAR token had climbed to $14.96, up 8.38% over the past 24 hours. Despite the intraday gain, the token remains down roughly 12% over the past week following a broader downturn across the crypto market.
Near Protocol’s USN stablecoin
The newly launched USN is an algorithmic stablecoin that uses a mix of tokenomics to maintain a 1:1 peg to the US dollar. It was introduced by Decentral Bank, a decentralized organization built on the Near Protocol.
Users can burn NEAR tokens to mint USN, and they can also burn USN to redeem NEAR tokens.
Decentral has indicated that early lenders could receive yields of up to 20%, positioning USN as a competitor to the well-known Terra UST stablecoin.
USN reserves will be managed by the Decentral Bank DAO. The DAO will vote monthly on the distribution of $10 million in rewards to support USN liquidity and trading.
Crowded stablecoin market
USN faces significant competition in the stablecoin market, with Terra’s UST as a primary rival. Terra’s UST already benefits from approximately $2.5 billion in dollar-denominated support within its reserves.
Another anticipated entrant is USDD from the Tron blockchain, which has marketed itself with yields as high as 30% APY.
Many investors are taking a wait-and-see approach toward USN, expecting that additional DeFi products and integrations on the Near Protocol will be necessary to expand USN’s utility and adoption.