The overwhelming of Defi, Decentralized Stabilization Currency USDN Is Emerging

4 min readSep 2, 2020

The USDN, the decentralized stabilizer, certainly fired the first shot at NGK Global! It is not only based on the market demand, but also the inevitable trend of the development of stable currency, compared with the existing stable currency need to pay any pain, the design of decentralized stable currency is subversive for digital currency or Defi.

USDN, with NGK Global, is the current shining star in the industry. The reason is not just that it is a stable currency system, but also a DeFi app. Its stability logic is simple: keeping prices near $1 through supply and demand. higher than the benchmark price, increased supply, lower than the benchmark price, and reduced circulation.

USDN stablecoin

The biggest characteristic of decentralized stable currency is the flexible price reflected by the setting of flexible supply.

A lot of people can’t understand the de-centralization stabilization algorithm, and most transaction users are only looking at the price, but in fact the de-centralization stabilization algorithm is very good at guaranteeing the relationship between the market value and the price, assuming that it has dropped by 10% in the last 24 hours, but it has issued another 10%, which has little impact on the token value of the user.

Investors need to focus on its market value change, not just the price, although the price has fallen, but the market value growth is still in a rising cycle, that is to say, the decline in the price of a decentralized stable currency is the result of the market supply and demand triggering the stability mechanism.

We will find that in the supply-and-demand relationship between digital currencies, the correlation between Bitcoin and other cryptocurrencies is too high, for example, the surge in Bitcoin will cause other cryptocurrencies to soar, so de-centralizing and stabilizing currencies is also seeking a digital, stable currency that is less correlated with Bitcoin.

USDN stablecoin

Decentralized stable currency will become an important role in the future stable currency market, but it depends on the precise design of algorithms and the superiority of contracts.

USDN’s goal is to create a digital commodity that is highly unrelated to Bitcoin and other asset classes, and its unique architecture and incentives make existing price-oriented trading strategies untenable for demand, requiring a new trading strategy that considers supply comprehensively.

Given this, the USDN will show a unique way to move.

According to USDN’s operating conditions and incentives, the system has no centralized supervision of prices or supply, based on a decentralized network of traders. The algorithm adjusts the supply according to the demand, and shows the counter-cyclical characteristics that other digital assets do not.

On the security issue, USDN at the contract code level, follows the block chain open source principle, will open source code for the full network supervision, at the same time, the conversion and purchase of USDN can be directly sold on the decentralized exchange on NGK Global, security is very high.

For other stable currency designs, USDN has improved the ease of exchange, allowing trading on NGK Global exchanges to be exchanged using usdt or eth, excluding a single eth, which reduces the entry threshold for many users for the recently high eth.

Second, the most prominent part of the DeFi project — liquidity-based bets are the focus of USDN, which is mainly to generate excess profits by providing liquidity to projects. The liquidity pool does not bear any additional risk, because the terms of the collateral have not changed.

USDN stablecoin

It is a practical word: The liquidity bet provides a very simple and crude way to profit, and you can only hold it and make money!

In the USDN pledge system, the more liquidity is provided, the longer the duration is, the larger the share of the USDN liquidity pool is obtained, and the process is unmanaged and performed on the chain. As more and more USDN is incentivised to be pledged, the price of USDN will continue to rise.

And the sustained increase in profits will make users more profitable and attract more people.

In addition, USDN joined the original deflationary model to better control market malevolence. In USDN’s deflationary model, users consume 1% of their money in transactions and transfers. In this process, the stable currency USDN will be more valuable.

How far can DeFi go? In fact, DeFi is just in a state of being a start, and it needs more optimized products to enrich this block, more high-quality financial products to be used in de-centralization systems, which is a necessary step in the blockchain, and a good start for the stabilization currency USDN.