Quick Overview and Timeline - USN
- USN launches in April 2022 by an anon team (those who know all know who is really behind USN).
- USN launches with a v1 that used a novel on-chain arbitrage and currency board mechanism to maintain the 1-1 peg. Link to v1 Whitepaper
- Shortly after, on June 2022, USN transitions into v2, that itself has two stages - first was a 1-1 backing with USDT, and latter second stage would re-introduce volatime assets such as NEAR.
- October 24 2022, USN wind down announced by Decentralbank
- On the same day the NEAR Foundation releases a blog post and a full statement announcing a USN Protection Program: $40m to cover the shortfall in backing for USN.
- Also on the same day, there was a coordinated PR campaign - NEAR Foundation seem to have secured more coverage for the USN than they did for any other launch.
- Who is the team behind USN?
- Why did USN receive unconditional support from the beginning?
- How did a ‘fully-collateralised’ stablecoin end up with a ‘$40m hole’?
- How long did the USN team and/or NF, Proximity knew about the ‘issue’ with USN?
- Why did USN team continue generous USN incentives even to this day if they had knowledge USN was insolvent?
- Why is NF bailing them out?
- Why and how was the $40m amount for USN determined?
The Beginning of Problems
I’ll say it briefly and move on. Keeping it PC to avoid getting censored (again). The Decentralbank team were mere puppets who were following direct orders of CORE NEAR team members.
The issue when putting puppets in place to operate n your behalf, is that you may prioritise your personal relationship or whatever else over actual experience or capacity to execute. From day 1 the USN team proved to be sloppy and incompetent, but no one says anything because we know ‘who is really behind’
The NEAR Foundation makes a series of wild allegations on their statement which proved to me they had little to no visibility over USN and don’t really understand what is going on.
According to the NEAR Foundation, USN code can be seen and verified within the smart contract code (links to a Github). If the code can be seen and verified - how did it lose $40m?! There are only two options… either there was an exploit to the original code OR they didn’t actually lose the money…
Also troubling that they admit the issue occured under v1 - so basically Decentralbank LIED for months about it being fully collateralised. (Although by NF warped logic - losses occured due to extreme market volatily BUT NOT due to the price of NEAR
The REAL Problem
There are two key transitions here to pay attention to -
New Management. I would assume USN was in the works long before Marieke took over on January 1. The Era of Marieke has also seen almost a full turnover at the NF and complete restructuring of teams and funding. There is a strong possibility that newer hires simply do not have the knowledge of previous dealings or the authority or confidence to challenge other perceived powerful entities.
Transition from v1 to v2. There is one major FEATURE on v1 that becomes a BUG on v2.
But before we jump into that, which is actually the core problem, I just want to provide some extra context:
- Sources within Proximity have confirmed that the actual USN shortfall is around $21m - so alarms should immediately go off as to where are the remaining $19m meant to go.
- A well known and respected, technical founder within NEAR ecosystem started sounding the alarm back in May - he confronted the USN team on Telegram with the actual on-chain data that showed USN wasn’t actually backed at all. Silence. (There’s a screenshot of that conversation going around).
- USN Protection Program is an off-chain initiative, making it impossible to know how much money has been redeemed, by whom, or any other metric that community may be interested for the sake on transparency. It requiring KYC also means that, by design, most retail has been encouraged to swap on DEXs rather than use the Protection Program. REF still has, two months after wind down, an $18m USN-USDT pool… Those $40m are clearly going to be distributed among three or four people.
Calling On-Chain Detectives
There are so many more questions I would like now to invite the rest of the community and relevant authorities to join me -
Why did the NEAR Foundation provide an excessive amount of funds when Decentralbank still had ~5.66m NEAR? These funds have now been ‘donated to the community’ and transferred to a Sputnik DAO. Are there any connections between those who decided to overfund a shady Protection Program and those who have now received a $5m NEAR donation?!
Why did Decentralbank distribute millions of dollars in Defi Incentives. We know liquidity provision is highly centralised - so a handful of individuals and entities took most of the incentives. I believe there are strong links between decision maker (he who sets incentives) and LP (he who took incentives).
Help me track the issuance and redemption of USN, specifically as it relates to transition between v1 and v2. THIS is where the real fraud may be…
The v1 Whitepaper (download while you can), which has now been taken down from website, is not available on Github and I was only able to retrieve doing some digging, has a very interesting feature.
Otherwise, it seems like an anon team printed tens of millions of dollars worth of USN while relentlessly lying about it being fully backed. Then the NEAR FOUNDATION inexplicably hands over $40m to an even shadier off-chain Protection Program where - it seems, the USN that was minted out of thin air can now be redeemed by those who control it, siphoning out $40m out of the Foundation and into the hands of a corrupt core.
Note to the Censors - Hairen is a pseudonym. I have been around since the beginning. I have eyes and ears in many places. I only post things that I deem vital for the ecosystem to survive. Nuke this post or account and it will pop up elsewhere. You can’t hide the truth.