Neutrino USD (USDN), a stablecoin of the Waves ecosystem, has lost its peg, currently trading at $0.85. What can be the reason?
The crypto market is hovering around the fear of the collapse of yet another algorithmic pegged stablecoin. USDN, the stablecoin of the Waves ecosystem, is trading at around $0.85, almost 15% down from the peg of $1.
Further, the price of the Waves token has been down by more than 16% in the last couple of days. Waves token is collateral for USDN.
Why Did Waves Price Plummet?
Today, Upbit, a South Korean exchange, flagged Waves with an investment warning. As mentioned in the announcement, the reason for flagging it is that USDN is not pegged adequately to $1. The announcement reads, “Upbit has been monitoring the price trend and deemed that there’s risk of unexpected investor’s loss due to WAVES value volatility.”
The South Korean exchange will conduct a detailed review, and if the reason for the investment warning is not resolved, it might delist the token.
The announcement sparked fear among the Waves community, especially Upbit users. According to data from CoinMarketCap, Upbit has 33.90% volume dominance of Waves, the highest among all the exchanges. It is followed by Binance, which has a volume dominance of 10.97%. The community believes that the increased trading volume on Upbit may indicate that South Korean users are dumping Waves.
The administrator clarified on their Telegram group that “There were no bad actions inside Waves ecosystem, the fall is due to the marking of Waves as a risky asset on the Korean exchange Upbit.”
The Neutrino USD Depeg
USDN, the stablecoin, has a history of remaining unstable, as seen in the charts from CoinMarketCap. In the last three months, it maintained its peg only for a brief period in Oct. Such volatility may have resulted in the Waves ecosystem being flagged as an investor warning in Upbit. Due to the warning, the stablecoin may have lost its peg furthermore.
Waves, the Next Luna?
The community hopes that Waves does not have the same fate as that Luna. The algorithmic stablecoin UST, from the Terra Luna ecosystem, depegged in May, and the price of the Luna token crashed nearly to zero. The team shares a Medium article explaining the difference between UST and USDN in an attempt to tackle the fearful sentiment.
The telegram admin has mentioned that one of the most important concerns of the team is to re-peg USDN to $1. The Neutrino roadmap will be published in mid-Dec, which is likely to include the plan to return the peg.
Meanwhile, the admins recommend attending an Ask Me Anything (AMA) session tomorrow with the founder, Sasha Ivanov. According to the admin, the topics about Upbit exchange and the fall in the price of Waves are also likely to be discussed in the AMA.
BeInCrypto has reached out to the Waves team to receive comments about the current issue.
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