What Is Near Protocol USN?
First, let's briefly talk about the NEAR project itself. It is clear that it is incredibly difficult to thoroughly understand the technology of such protocols – it is no coincidence that their documentation contains hundreds of pages, but it is enough for investors to know the most basic points and key features.
The NEAR blockchain is based on the Proof-of-Stake algorithm and can conduct up to 100 thousand transactions per second, the network architecture uses the sharding mechanism, a scaling technique that allows you to store information in the form of multiple databases. In other words, shards are unique pieces of the network, each of which contains its own information about smart contracts and balances.
To some extent, this may remind Polkadot, where they build a system of blockchains that do not contact each other precisely in order to increase throughput. But the shards are connected to each other – each block on NEAR contains snapshots of transactions on all "pieces" of the network at once. In addition, each shard has its own validators that work in parallel, which also allows you to increase network bandwidth and provide cheap (compared to Ethereum) fees. Worth mentioning is the Aurora solution, which allows developers to port Ethereum applications to NEAR and link smart contracts from the two networks to each other.
What Is USN Stablecoin?
Like any other serious infrastructure project, NEAR has its own native stablecoin. USN is an algorithmic stablecoin whose rate is pegged to the dollar, but not backed by it. In general, the binding method is similar to the infamous UST mechanism from Terra, but there are important differences that greatly increase the reliability of the tool.
If LUNA tokens used to issue UST are burned, then NEAR tokens are placed in a reserve fund, where other stablecoins are also located in order to provide additional price stability. For example, the first USN issue of 1 billion was almost completely converted into dollar-backed USDT.
Problems with UST became largely possible due to the desire to lure investors through high rates for depositing: at some point in time they reached 20%, but began to fall rather quickly, after which people began to massively get rid of the stablecoin, which had lost its attractiveness.
The yield on USN is provided by staking NEAR tokens from the reserve fund in the network. At the moment it is 15%. The developers do not guarantee that these values will be stable, as they depend directly on the demand for USN and are calculated dynamically. The higher the demand for a stablecoin, the more NEAR is withdrawn from circulation and sent to reserves, as a result of which its value becomes higher, and therefore the yield on USN becomes higher.
You can get an additional opportunity by putting your tokens into the official Near wallet and delegating them to validators, whose rating is in the Staking tab. It is better to distribute funds among several validators in order to protect yourself from possible slushing – a punishment for manipulating transactions, which is expressed in writing off part of the coins from the participant's balance.
The yield on NEAR is lower than on USN and is about 10% per annum at the moment, but this shortcoming is compensated by the high prospects for the growth of the price of the token itself.
The developers of USN are counting on the rapid development and growth of capitalization. If the stablecoin manages to quickly integrate into large crypto-exchanges and other protocols, its buyers will be able to receive more than 20% -30% per annum through staking.
The advantages of a stablecoin include growth prospects, cheap and fast transactions, the possibility of minting directly in Near wallets, high profitability from staking in various decentralized finance protocols, the ability to pay for gas in the Near network (in the future).
Stablecoin use cases are numerous:
Payment for gas in the Near network.
Stablecoin trading on decentralized cryptocurrency exchanges.
Earnings in decentralized finance projects.
Earnings in DeFi projects (in the networks NEAR, Aurora and others).
