Cody McGrath 
NEAR, the eponymous protocol’s native currency soared on Tuesday as the blockchain’s long-awaited stablecoin, USN, began trading. NEAR jumped nearly 10% from a three-week low and is currently trading at about $14.8.
However, the token is still down 12% over the past week as a result of broader losses in the crypto market.
Trading in the Near Protocol’s algorithmic stablecoin began late Monday. NEAR-based decentralized organization Decentral Bank, launched USN. While the token’s yield will be dynamic, Decentral claims that early lenders would likely receive a yield of 20%, which rivals that of Terra’s UST stablecoin.
NEAR’s USN token goes live
USN is an algorithmic stablecoin, which means it uses a mix of tokenomics and a reserve to maintain its 1:1 peg against the U.S. dollar. NEAR tokens can be burned to mint USN, and vice versa.
USN’s reserves will be maintained by Decentral Bank. The DAO intends to hold monthly votes in order to share $10 million rewards for trading in USN. The token’s algorithmic nature makes it compete directly with Terra’s UST.
The planned launch of USN had been leaked earlier this month, causing NEAR prices to rise to near record highs. The anticipated 20% yield is the main attraction factor for USN.
Interest in Stablecoin staking has increased this year, as investors sought constant returns amid high market volatility. On Tuesday, total value locked on Terra’s Anchor Protocol, the blockchain’s largest DeFi platform, reached a new high.
USN faces tough competition in crowded market
While NEAR prices rose, the launch’s social media reaction was mixed. The majority of users said they’ll wait and see what happens with USN, while also keeping an eye out for more DeFi options in the Near protocol.
In the stablecoin market, USN faces tough competition. USN will compete with Terra’s UST, which is backed by around $2.5 billion in reserves and is the third-largest stablecoin by market capitalization.
I’m not apeing in now. I want to see how this plays out. I will follow $USN closely though. And soon there will be another competitor in $USDD (Tron) that promises 30% APY.
-DeFi analyst @Route2FI
USN also has to compete with established stablecoins like Tether (USDT) and Circle (USDC), both of which command enormous volumes.
NEAR isn’t also the only one that has just entered the stablecoin space. Justin Sun’s Tron plans to launch its stablecoin next month, with $10 billion in reserves and a claimed 30% yield.