The NEAR Foundation has announced $40 million for the "USN Protection Program

This fund is intended to protect USN holders and users by allowing them to redeem the stablecoin on a 1:1 basis against USDT.

The move follows a separate announcement by Decentral Bank (DCB) on Oct. 24 that it would stop issuing the NEAR blockchain-based USN independent stablecoin.  

The company said that the stablecoin has faced many challenges over the past few months due to changes in market perception caused by recent high-profile incidents (such as the UST crash), adding:

"As a result of these challenges, we made the difficult decision to wind down the USN project in a controlled and responsible manner to protect USN holders."

The NEAR Foundation responded quickly to prevent the panic and collapse of its own token, as users feared a repeat of the LUNA moment. The fund found that algorithmic mechanisms failed "during extreme market conditions," resulting in a collateral shortage.

Despite the outflow of collateral from the ecosystem, the native token has survived the storm. At the time of publication, NEAR was trading up 2% for the day at $2.98.

However, bears have sunk their teeth into NEAR during this downturn. It is now down 85% from its January all-time high of $20.44.