USDR stablecoin depegs to $0.53, but team vows to provide solutions
Real estate-backed stablecoin USDR lost its peg to the United States dollar after a rush of redemptions caused a draining of liquid assets such as Dai ( DAI ) from its treasury, its project team has revealed.
USDR, backed by a mixture of cryptocurrencies and real estate holdings, is issued by the Tangible protocol, a decentralized finance project that seeks to tokenize housing and other real-world assets.
USDR is mostly traded on the Pearl decentralized exchange (DEX), which runs on Polygon.
An update on $USDR
— Tangible (@tangibleDAO) October 11, 2023
Over a short period of time, all of the liquid $DAI from the $USDR treasury was redeemed.
This lead to an accelerated drawdown in the market cap.
Combined with the lack of DAI for redemptions, panic selling ensued, causing a depeg.
We’re working on…
In an Oct. 11 tweet, Tangible explained that over a short period of time, all of the liquid DAI from the USDR treasury was redeemed, leading to an accelerated drawdown in the market cap, adding:
“Combined with the lack of DAI for redemptions, panic selling ensued, causing a depeg.”
USDR experienced a flood of selling at around 11:30 am UTC, driving its price as low as $0.5040 per coin. It recovered slightly, to around $0.53 shortly afterward.
USDR loses its peg on Pearl DEX. Source: DEXScreenerDespite the coin losing nearly 50% of its value, the project’s developers have vowed to provide “solutions” to the problem, saying it was merely a liquidity issue that has temporarily challenged redemptions.
“This is a liquidity issue,” they stated . “The real estate and digital assets backing USDR still exist and will be used to support redemptions.”
Despite this loss to the treasury, the app’s official website stated on Oct. 11 at 9:57 pm UTC that its assets are still worth more than the entire market cap of the coin.
USDR total backing vs. market cap. Source: Tangible14.74% of USDR’s collateral consists of Tangible (TNGBL) tokens, which are part of the coin’s native ecosystem. The team claims that the remaining 85.26% is collateralized by real-world housing and an “insurance fund.”
Related: Insurance, real estate: How asset tokenization is reshaping the status quo
Stablecoins are intended to always be worth $1 on the open market, but they sometimes lose their peg under extreme market conditions.
Circle’s USD Coin ( USDC ), the sixth-largest cryptocurrency by market cap as of Oct. 11, fell to $0.885 per coin on March 11 when several banks in the U.S. went bankrupt, but it regained its peg on March 14. Terra’s UST lost its peg in May and never recovered. It is valued at $0.01 per coin as of Oct. 11, according to data from CoinMarketCap.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Almost 90% ot Airdrop Tokens Crash Within Three Months
Announcement on Resumption of FTM Network Deposit and Withdrawal Services
We are pleased to announce that FTM network deposit and withdrawal services are available again on our platform. We apologize for any inconvenience caused during the suspension period! Join Bitget, the World's Leading Crypto Exchange and Web 3 Company Sign up on Bitget now >>> Follow us on Twitter
$10 – $20 RIO ATH Price Possibility Comes Into Play as Bullish Inverted Head and Shoulders Pattern Forms
$66,000 BTC Price Nears as Bulls Take Full Control, Bitcoin Races Towards Next $68,000 Crucial Resistance Level