Development progress update May 11: Chai DEX with $USN stablecoin
To expand financial products and features on Chai, supporting both users and the Near ecosystem, Chai plans to list $USN stablecoin on Chai Money Market and upcoming Chai DEX soon!
Chai DEX is coming!
Chai devs are working tirelessly on Chai DEX to become a premier DeFi hub for Aurora’s ecosystem. Chai DEX includes full of essential features such as Dynamic AMM, Stable AMM, Limit and Stop orders. Chai DEX together with Chai Money Market focused on becoming a cornerstone DeFi product on Chai to drive platform growth.
Chai devs have developed Stable AMM to receive Interest Bearing tokens (chUSDC, chUSDT, chUSN) to enhance users’ returns without relying on intermediaries. Moreover, Chai is finishing developing a unified Swap router to accommodate both Dynamic and Stable AMM.
Also, Chai is working on improving the user experience with consolidated UI/UX, a more complete and comfortable experience that helps users find more new market opportunities.
With the new $USN stablecoin, the Chai ecosystem will grow even faster!
What is $USN stablecoin?
- $USN stablecoin is the native stablecoin of NEAR Protocol (pegged to the $USD), offering an uncapped yield with min 11% annual percentage yield (APY).
- $USN is minted via depositing NEAR tokens into the reserve fund, and can always be redeemed (burned) for an equal value of NEAR, based on the NEAR/$USN price.
- The reserve fund will also contain $USDT as the extra backing for $USN, making $USN an over-collateralized stablecoin ($USDT and NEAR token).
Unlike the case of $UST where you burn LUNA to mint $UST, $USN is minted in a “swap” process with NEAR. The NEAR used to mint $USN is then staked on the NEAR blockchain to generate staking rewards, which get distributed to $USN holders.
$USN’s core stability mechanisms consist of on-chain arbitrage and the reserve fund based on the Currency Board principle. Combining the growth potential of $UST and the strong peg defense of $FRAX, $USN is positioned to be one of the most effective ways to bootstrap liquidity in the NEAR ecosystem.
What is the future of $USN stablecoin on Chai?
- $USN is intended to be used as a medium of exchange within the Near ecosystem. In the future, with Chai, users can take loans in $USN, trade $USN, and exchange $USN for $NEAR anytime right from their wallets within the ecosystem.
- Borrowing demand for $USN will be great, as long as the borrowing cost is lower than $USN’s reward. Borrowing will in turn boost the supply APY for $USN, bringing more rewards to $USN holders. At the same time, Chai Money Market will incentivize $USN pools with $CHAI soon, adding more rewards to holders.
- With Chai DEX and Stable AMM, users can swap between $USN/$USDT/$USDC with lower slippage, lower fees, and higher capital efficiency.
- Liquidity Providers can provide liquidity and earn interest while impermanent loss suffered is significantly lower due to the Chai Stable AMM invariant algorithm.