Neutrino, a Wave-based algorithmic stable coin, has completed the newly approved update by its community members, which implements the new backing ratio (BR) calculation logics for the coin in an effort to improve the stability of USDN.
Neutrino Protocol announced the completion of the “Update 1.7.2,” which implemented the new BR calculation logics via its official Twitter platform. The update, as stated in the proposal, is expected to help maintain the value of the algorithmic stablecoin.
In response to the current crypto market conditions and an effort to stabilize USDN, the protocol, on September 20, announced a new proposal via Twitter where its community members were to vote for either a change in its BR calculation logics or a reduction in WAVES to USDN protocol fee.
99.49% of the community members voted for a change in BR calculation logics, and 61.2% voted against reducing WAVES to the USDN protocol fee.
As stated in the proposal, the new calculation method will exclude the $546 million worth of USDN locked in the vesting that does not participate in its market circulation from its BR calculation. As a result, the backing ratio will be calculated based on the circulating supply and not the total USDN supply.
The inclusion of the locked UDSN and Vires.Finance liquidity crunch has been responsible for its instability. This new calculation method is expected to significantly reduce Vires issues effect on USDN stability and stop the contagion that results from Vires.Finance liquidity crunch.
According to Neutrino Protocol, the vesting USDN amount is now calculated in the following way:
usdnBalance(acc) + usdnStaking.getUsdnStakedAmt(acc).
It is worth noting that the algorithmic stablecoin depegged from $1 in April and traded around $0.796 when Waves token backing the coin dropped by more than 26%. It is, however, expected that newly implanted BR calculation logics will help improve its stability.