Proposal for a better USN model

Ecosystem
1

PROPONENTS:
Adam Truong

  • Near account for payment: adamtruong6868.near
    Adam Truong

OBJECTIVE:
To improve USN to be the best of the best algorithmic stable coin in the market.
100% sure of the peg to 1$ in all cases, even Near drops to 0$.
Much more incentive for Near holders to provide their Near to the reserve fund for getting rewards.
The development spiral will replace the death spiral. Better for everyone: Near ecosystem; USN holders; Near holders & fund providers.

BRIEF IDEALS:
Flexible Reserve Fund (R):

  1. Replace the Initial Reserve Fund by Flexible Reserve Fund, which is provided by Near holders, who willing to take risk to get more rewards.
  2. Users will provide Near (or 50%Near+50%USDT) to secure the system (Called Reserve Providers).
  3. Liquidity tokens (LT) will be minted to Reserve Providers as proof of fund providing.
  4. Reserve Providers will receive rewards > 11% from staking + rewards from TX fees (for incentive).
  5. Reserve Providers can not withdraw fund if r=F/L < = rmin - around 200% ().
    Reserve Providers can not provide more fund if r=F/L >=rmax - around 800% (    ) (To avoid too much reserve fund but each provider gets small reward – less incentive).
    Liability Fund (L):
  6. New USN will be minted with the ratio 1:1 of Near price (Called Liability Fund). L = number of minted USN.
  7. New USN will not be minted more If the ratio of F/L < = rmin (*).
  8. L will be used for AMM pool to balance Near - USDT.
    Total Fund (F): F = R + L.
    Ration r = F/L.
    (*): This value can be changed by DAO.

Benefit of new model:

  1. Total reserve fund always much larger than the minted USN → system is secured.
  2. When market crashes too fast and too deep, the number of USN always can be exchanged to NEAR or USDT without depeg.
  3. In normal or bull market, the amount of NEAR in both flexible reserve fund and liability fund are very big, it’s good for all parties (Near ecosystem; fund providers and USN holders).
  4. TX fees will be compounded in reserve fund to increase the fund.
  5. Part of TX fees will be distributed to Flexible Reserve Fund providers for incentive.
  6. Most of the current features from USN can be maintained, just add in Flexible Reserve Fund and the thresholds.
  7. The new model can be the best model of stable coin in the market at the moment.

For details of proposal, I made the proposal in the slides as below.

1 Like
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Hey!

The NEAR Foundation is not responsible for USN.

USN is an independent project, led by a team named Decentral Bank, which is organized as a DAO. It is collaborating with Proximity Labs, which is a DAO contributor.

You can join their Discord here

If they’re around on the forum, feel free to discuss it with them here, too.

2 Likes
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Thank for information. i will send to them there also. But anyway if it’s a native stable coin on Near. It will be better for Near core team to take a look on my proposal. It will be better for Near and participants.

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It’s not integrated into the protocol layer like UST. It’s an independent project built on NEAR, the core NEAR team at NF isn’t involved in it.

2 Likes
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I think we all need to do our best to communicate this fact to the broader ecosystem. Many outlets and publications have been incorrectly stating that USN is NEAR’s version of UST and proceeding to create FUD around NEAR due to this misconception.

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Here’s a good example of the many FUD articles I’m seeing everywhere now.

https://www.phdcapital.fund/post/will-usn-be-another-algorithmic-stablecoin-fiasco

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of cause there are main differences between USN and UST. But to make it become the best of the best with the development spiral in both bear and bull market, i think we just need to modify a little bit more.
My proposal is based on a formal verified paper about stable coin in IACR. It will make Near become strongest ecosystem with the best stable coin model.

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As Mark said correctly, this is the wrong forum as USN is not NEAR, but since you have quoted a “FUD article” just my small comment on that part.

In the quoted article the writer himself writes:
Bottom line:
Unless USDT depegs and Near crashes simultaneously, USN is safe.

IMO that’s a fair statement and not really negative unless you just read the headline and read into it something else.

Further he gives his personal opinion about USDT, which again, IMO is fairly correct from his point of view. You may have different opinion and that would be ok, too.

I don’t totally agree with the proposal of the OP but I think is good start discussing (potential) improvements of a product.

Happy to discuss further in private messages, as again, wrong forum.

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more than happy to get your feedback. I am willing to hear more from you about the proposal in private messages.