Decentralized Finance or DeFi is an Ethereum based financial tool that has been making headlines for quite some time now following the surge in the DeFi products or platforms offering DeFi services. Speculations are on a high whether DeFi services will disrupt the traditional financial services existing today.
However, it cannot be denied that with the immense benefits that DeFi products provide, developers and users are slowly and gradually diverting towards DeFi; lending protocols, security tokens, derivatives, and much more – DeFi is playing out each role with perfection.
Traditional finance, which is controlled by a central bank that works with collaboration with a small group of corporate banks, has its limitations. Still now millions of people are not part of the traditional banking systems for some reason or the other, maybe for the lack of a permanent address, credit history, or failure to put up a reliable enough banking infrastructure.
Whatever the reasons are, for these people who have previously struggled a lot to gain access to traditional finance and borrowing, and have always received a back thrash that has crumbled them to the core, blockchain especially DeFi serves as the most touted solution for finance to them. It is an open, permissionless, interlocking Ethereum based financial product that allows anyone having an internet system to borrow, lend, or bank without the interference of any middlemen.
Even though the debate carries on whether DeFi can replace the traditional finance products, it will serve as a convenient extension. This is because the traders and investors are now paying attention to absolute ownership of the assets that they are trading, and they are seeking alternative ways to preserve value.
Creators of the DeFi services are therefore trying different ways to transform the scope of financial services radically. A new algorithmic stablecoin named Neutrino USD has been introduced in the system expected to bring in rapid improvements in the fiat-based stable coins.
Neutrino USD (USDN) is the first-ever stablecoin with its price tied to the USD, which means that 1 USDN will always cost 1 dollar. The USDN uses WAVES – a popular crypto token as a reserve, and the entire system has calibrations to keep a check on its stable price and transparency. The stability of its rate depends on the algorithm and the market arbitrage.
Adding the Neutrino protocol to the DeFi services will enable the tokenization of national currencies, with the help of its three intertwined tokens, namely WAVES, NSBT, and USDN. With the Neutrino protocol’s help, the uses will be able to earn passive rewards through blockchain. It will also make staking easier, by leveraging the staking reward system of the WAVES algorithm.
The USDN Stakers can earn daily staking rewards with 8 to 15 % APR without worrying about price volatility and controlling their assets fully. Staking USDN is also safe as it is not controlled by any central authority, and the users have full control over their assets. They can withdraw their assets any time without losing the previous rewards that are already accumulated.
Using Neutrino, the users will be exposed to a host of additional DeFi services like buying USDN with fiat currency and then trading it to some other non-WAVES based currencies, thereby opening ways to enter other DeFi ecosystems.