USDR stablecoin depegs to $0.53, but team vows to provide solutions

Real estate-backed stablecoin USDR mislaid its peg to the U.S. dollar after a unreserved of redemptions caused a draining of liquid assets specified arsenic Dai (DAI) from its treasury, its task squad has revealed. 

USDR — backed by a substance of cryptocurrencies and real-estate holdings — is issued by Tangible protocol, a decentralized concern task that seeks to tokenize lodging and different real-world assets.

USDR is mostly traded connected the Pearl decentralized speech (DEX), which runs connected Polygon.

— Tangible (@tangibleDAO) October 11, 2023

In an Oct. 11 tweet, Tangible explained that implicit a abbreviated play of time, each of the liquid DAI from the USDR treasury was redeemed, starring to an accelerated drawdown successful the marketplace cap, adding:

"Combined with the deficiency of DAI for redemptions, panic selling ensued, causing a depeg."

USDR experienced a flood of selling astatine astir 11:30 americium UTC, driving its terms arsenic debased arsenic $0.5040 per coin. It recovered slightly, to astir $0.53 soon afterward.

USDR loses its peg connected Pearl DEX. Source: DEXScreener

Despite the coin losing astir 50% of its value, the project’s developers person vowed to supply “solutions” to the problem, saying it was simply a liquidity contented that has temporarily challenged redemptions.

“This is simply a liquidity issue,” they stated. “The existent property and integer assets backing $USDR inactive beryllium and volition beryllium utilized to enactment redemptions.”

Despite this nonaccomplishment to the treasury, the app’s authoritative website stated connected October 11 astatine 9:57 p.m. UTC that its assets are inactive worthy much than the full marketplace headdress of the coin.

USDR full backing vs. marketplace cap. Source: Tangible.

14.74% of USDR’s collateral consists of Tangible (TNGBL) tokens, which are portion of the coin’s autochthonal ecosystem. The squad claims that the remaining 85.26% are collateralized by real-world lodging and an “insurance fund.”

Related: Insurance, existent estate: How plus tokenization is reshaping the presumption quo

Stablecoins are intended to ever beryllium worthy $1 connected the unfastened market. But they sometimes lose their peg nether utmost marketplace conditions.

Circle’s USDC (USDC), the sixth-largest cryptocurrency by marketplace headdress arsenic of October 11, fell to $0.885 per coin connected March 11 erstwhile respective banks successful the U.S. went bankrupt, but it regained its peg connected March 14. Terra’s UST lost its peg successful May and ne'er recovered. It is valued astatine $0.01 per coin arsenic of October 11, according to information from Coinmarketcap.