USDR Stablecoin Depegs to $0.53
BITmarkets Team
Oct 15, 2023
USDR, a stablecoin backed by real estate, has lost its peg to the US dollar according to its project team after a wave of redemptions depleted its treasury of liquid assets like Dai.
The Tangible protocol, a decentralized financial initiative that aims to tokenize real estate and other assets in the real world, issues the USDR stablecoins, which are backed by a combination of cryptocurrency holdings and real estate ownership.
The Pearl decentralized exchange (DEX), which utilizes Polygon, is where USDR is primarily exchanged.
Tangible stated in a tweet on October 11 that all of the liquid DAI from the USDR treasury was redeemed over a brief period of time, causing an accelerated decline in market cap, and added:
“Combined with the lack of DAI for redemptions, panic selling ensued, causing a depeg.”
Around 11:30 am UTC, a wave of selling caused USDR to drop as low as $0.5040 per coin. Shortly after, it started to rebound marginally, reaching about $0.53.
The project's developers have promised to offer "solutions" despite the coin losing roughly 50% of its value, claiming that the problem is simply a liquidity issue that has momentarily complicated redemptions.
"This is a liquidity issue," they said. “The real estate and digital assets backing USDR still exist and will be used to support redemptions.”
The app's official website declared on October 11 at 9:57 pm UTC that its assets are still worth more than the whole market cap of the coin despite this loss to the treasury.
14.74% of USDR’s collateral comprises 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 alongside an “insurance fund.”
Sources:
https://cointelegraph.com/news/usdr-stablecoin-depeg-liquid-dai-treasury-drain-redemption
