Vader will shut down stablecoin USDV, cannot find a ‘breakthrough’

According to the developer’s announcement on December 29, the app that generates the stablecoin Vader Protocol US Dollar (USDV) will be shut down.

The Vader protocol was an algorithmic stablecoin network similar to the failed Terra network. He was supposed to facilitate arbitrage to keep the USDV at $1 all the time. When Terra assets were decoupled from real-world assets in his May, the Vader team suspended the app’s mint functionality. We wanted to prevent users from being exposed to problems that could arise if the stablecoin was unpegged.

Vader’s team said they spent the next six months finding ways to improve the app to make it more secure. However, “after rigorous research and discussion, the team was unable to find any noticeable breakthroughs in the design of capital-efficient algorithmic stablecoins.”

They have suspended the write function so users are no longer able to deposit their remaining USDV into the app and get backing through the normal redemption process. Instead, the developer created a redemption portal for distributing the app’s remaining financial resources. They plan to keep the redemption app available to him until June.

Related: Realized loss from FTX collapse is smaller than Terra, other crises

To distribute the funds fairly, the developers broke the Curb and Uniswap liquidity pools, creating a snapshot of the existing shares so that the remaining funds could be distributed to the holders.

Vader Protocol USD appears to be delisted for all major coin price data fees. So it is unclear if the USDV holder will get back $1 worth of crypto or less for each coin.

The collapse of the USD Terra was one of the biggest cryptocurrency crashes of 2022. This spread the contagion across the cryptocurrency market and contributed to the shutdown of Midas Investments. Its founder, his Do Kwon, continues to be accused of violating South Korea’s capital market law, but authorities have yet to locate him.