NPK TALK SERIES (EPISODE 5)

Welcome to another exciting weekly episode of NPK Talk Series by Near Protocol Nigeria. Today just like other episodes we will be talking about a special feature as regards to the NEAR Ecosystem.

Recently we heard the announcement that Near Protocol (NEAR) is set to launch its own algorithmic stablecoin called USN on April 20th. The announcement was made by the founder of Zorax Capital, Zoran Kole, via a Substack blog post where he explained that the launch of the stablecoin will be ‘in partnership with other well-capitalized stablecoins’.

Furthermore, Sleuths on Twitter further noticed that a testnet version of Ref Finance — the second-largest decentralized exchange on Near — showed the stablecoin. The user interface on Ref Finance’s testnet website displays USN under its stableswap section along with other popular stablecoins like USDC, USDT and DAI. This implied that the stablecoin was being tested out, but was not necessarily indicative of the official team.

That Sounds amazing right? Well let’s break this episodes into the following segments::

First segment

• We get to know about Stablecoins and its types.

Second segment

• We get to know what it means to the NEAR Ecosystem

And lastly

• What does the stablecoin (USN) mean to the NEAR Ecosystem?
• Careful insights as regards stablecoins in the crypto world.

What are stablecoins?

In simple terms, “a stablecoin is a type of cryptocurrency that relies on a more stable asset as a basis for its value”.

Furthermore, most commonly, people refer to stablecoins as linked to a fiat currency, such as the U.S. dollar, Nigerian Naira etc. but they can also have value linked to precious metals or other cryptocurrencies. Stablecoins are essentially a less volatile cryptocurrency with greater potential to resemble the types of currencies people already use everyday.

According to Doug Boneparth, a financial advisor and president of Bone Fide Wealth in New York. The purpose of stablecoin is to provide stability of price as people are transacting across coins or between fiat and digital currencies, because crypto markets can be volatile,”

What are the types of stablecoins?

The following are some of the types of stablecoins namely:

• Fiat-Collateralized Stablecoins such as US Dollar, Nigerian Naira etc.
• Crypto-Collateralized Stablecoins such as MakerDAO’s DAI (DAIUSD)

Second Segment

In this segment, Chinedu Nwadike Emmanuel the Technical Lead of Near Protocol Nigeria gave his insight as regards the following the headings:

• What does USN (NEAR’s Stablecoin) mean to the NEAR Ecosystem?

The hype is growing and the market is ripening, I think it’s bullish. It will turn the heads of retail traders as well as attract institutional investors to NEAR

• How will it affect its parent token $NEAR token?

This is a good development to Near, besides, since it has been backed by $NEAR this also makes $NEAR token to increase in value as demand grows.

And lastly,

• What does the stablecoin USN mean to the NEAR Ecosystem?

Near Protocol hopes USN will see th project reach the heights of Terra’s (LUNA) and its UST stabelecoin Plus DEXes on near have especially $ref has a higher chance to capture more Total Value Locked (TVL) and probably bull.

• Careful insights of stablecoins in the crypto world.

Regulation will likely be a big theme for stablecoins in 2022, experts say. “I think 2022 will be a bigger year of regulation than any other year before,” says Boneparth. “The more mainstream crypto becomes, the more regulators and policymakers are going to pay attention to it.”

Stablecoins have been “scrutinized” in particular because regulators don’t know what to make of them and are rushing to figure out how to establish laws and guidelines on how to treat stablecoins, Boneparth says. It’s unclear whether U.S. regulators will choose to treat them as securities, banks, or something else entirely. The White House is planning to release an initial government-wide strategy for crypto and other digital assets, and will ask federal agencies to assess their risks and opportunities, according to a Bloomberg report.

Do share your reaction in the comment section, thank you for your time.