- USDR stablecoin has lost its peg to the U.S. dollar.
- Tangible Protocol has confirmed the news.
- The protocol assured customers of making them whole.
The crypto industry is bracing for a likely scandal after Polygon-based stablecoin Real USD (USDR) lost nearly 50% of its value “over a short period of time,” according to its project team.
Unlike popular stablecoins, such as USD Coin (USDC) and Tether (USDT), which are mainly backed by cash and short-term U.S. debt, USDR flaunts an unusual reserve composition, including real estate holdings in the U.K. and a mixture of cryptocurrencies.
Liquidity Redemption Destabilizes USDR
The “rebasing” stablecoin started depicting the signs of not being so stable on October 11 when it plummeted from $0.996 to $0.50 within four hours.
In an update shared on Twitter (X) on October 12, USDR issuer Tangible Protocol confirmed the depeg and stated that it was driven by massive DAI liquid redemption from the USDR treasury, leading to an accelerated drawdown in the market cap.
“As we’ve all seen, USDR has suffered a serious depeg. Over a short period of time, all of the liquid DAI from the treasury was redeemed. This led to an accelerated drawdown in the market cap. Combined with the lack of DAI for redemptions and liquidation timeline on real estate, panic selling ensued, causing a depeg. Our focus now is to make users whole.” The update read.
Tangible has promised to resolve the matter and share more updates “shortly,” terming the development as a liquidity issue. Notably, the protocol reiterated that the real estate holdings and digital assets backing USDR still existed and would be used to support redemptions.
A “Tangible” Reassurance?
Per Tangible’s on-chain data, the USDR Treasury currently holds zero DAI and a $6.2 million insurance fund as the only liquid assets for a circulating supply of 45 million USDR, worth about $45 million when pegged to the U.S. dollar.
The token backing the Treasury, TNGBL, has also lost nearly half its value within the last 24 hours, according to the latest market data from CoinGecko, not to mention traders selling USDR in USDC trading pairs for pennies on the dollar.
Stay updated on Circle’s groundbreaking move to mint USDC on Polygon:
What Does Circle Bridging to Polygon Mean for USDC Users?
Read why observers have reservations about Alameda’s 47% stake in USDT minting:
Alameda Research’s Massive 47% Stake in USDT Minting Unveiled
Source link: https://dailycoin.com/polygons-real-estate-backed-stablecoin-usdr-depegs-to-0-53/
