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As the cryptocurrency community weathers the bear market and tries to recover from the onslaught caused by stablecoin incidents like Terracrash, another algorithmic stablecoin is showing signs of an uphill battle, underperforming the dollar peg.
Algorithmic stablecoin Neutrino Dollar (USDN) has once again deviated from the dollar, marking the fourth time USDN has struggled to maintain its dollar peg this year. The Waves-backed stablecoin is trading at $0.90 at the time of writing.
correlation =/ here causation
but every time #USDN from #WAVES depegged
There was a Bitcoin crash.
Just a coincidence. Let’s see how this works. pic.twitter.com/ruJ0cKfezu
BareNakedCrypto, don’t send messages (@BearNakedCrypto) August 26, 2022
USDN plummeted to $0.78 in April as allegations of price manipulation began to surface. Stablecoins recovered within days of the initial crash. In the months that followed, however, digital assets again showed signs of weakening. In May he dropped to $0.82 and then again in June as he traded at around $0.93 per token.
To address the stability issue, the team behind the stablecoin vote Implement changes within the parameters of the protocol.After voting, the team Added A new mechanism to improve the economics behind the protocol. This includes changes to the maximum swap amount, a backing ratio protection mechanism, and improved reward distribution.
Related: Stablecoin Issuer Holds More Treasuries Than Berkshire Hathaway: Report
Meanwhile, a recent Acala Network exploit caused the stablecoin Acala USD (aUSD) to drop in price by 99%. With over $1 billion worth of his aUSD issued out of nowhere, its owner has been wondering how the decentralized financial protocol will recover. At the time of writing, aUSD is still trading at $0.65 per token.
Earlier this month, Huobi-backed stablecoin HUSD also fell to $0.82 due to liquidity issues. Depeg was due to close the market maker’s account due to regulatory compliance, according to the exchange. This caused a short-term depeg which was quickly fixed by the publisher.
