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<p class="is-style-lead">During a recent fluctuation in USDR’s value, a transaction involving 131k stablecoins yielded no return for the trader.</p>
<p>Following the startling revelation from yesterday’s events surrounding the real-estate-backed U.S. dollar stablecoin, Real USD (<a href="https://www.coingecko.com/en/coins/real-usd" data-type="link" data-id="https://www.coingecko.com/en/coins/real-usd" target="_blank" rel="noopener noreferrer nofollow">USDR</a>), a trader encountered a grave setback by swapping a staggering 131,350 USDR for 0 USD Coin (<a href="https://crypto.news/price/usd-coin/" data-type="link" data-id="https://crypto.news/price/usd-coin/" rel="noopener noreferrer nofollow">USDC</a>). This unfortunate event reflects the high-risk nature of decentralized exchanges (DEXs) and the looming vulnerabilities of asset-backed tokens.</p>
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   <p lang="en" dir="ltr">Due to the decoupling of the stablecoin USDR, this guy accidentally swapped 131,350 <a href="https://twitter.com/search?q=%24USDR&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">$USDR</a> for 0 <a href="https://twitter.com/search?q=%24USDC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">$USDC</a> while panic selling <a href="https://twitter.com/search?q=%24USDR&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">$USDR</a>.<br><br>And a MEV bot successfully arbitraged $107K.<a href="https://t.co/FHOJtaGcSD" target="_blank" rel="noopener noreferrer nofollow">https://t.co/FHOJtaGcSD</a><a href="https://t.co/IYtoqar29N" target="_blank" rel="noopener noreferrer nofollow">https://t.co/IYtoqar29N</a> <a href="https://t.co/USLF1qkVDK" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/USLF1qkVDK</a></p>— Lookonchain (@lookonchain) <a href="https://twitter.com/lookonchain/status/1712446623362760763?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">October 12, 2023</a>
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<p>The data, sourced from the prominent blockchain analytics firm <a href="https://twitter.com/lookonchain/status/1712446623362760763" data-type="link" data-id="https://twitter.com/lookonchain/status/1712446623362760763" target="_blank" rel="noopener noreferrer nofollow">Lookonchain</a>, highlighted that the swap took place on the BNB Chain via the decentralized exchange, OpenOcean. This transpired during a tumultuous period when USDR had decoupled from its pegged value, plummeting by almost 50% due to a liquidity crisis.</p>
<p>In a savvy move, a maximal extractable value (MEV) bot detected the disparity, capitalizing on it to achieve a whopping $107,002 in arbitrage profits.</p>
<p>You might also like: <a href="https://crypto.news/learn/real-estate-tokenization/" rel="noopener noreferrer nofollow"> Real Estate Tokenization: What Is It, How Does It Work &amp; How Can You Invest In It? </a></p>
<p>These vulnerabilities are not unprecedented in the crypto world. Last year, a trader navigating the <a href="https://crypto.news/tag/uniswap/" data-type="link" data-id="https://crypto.news/tag/uniswap/" rel="noopener noreferrer nofollow">Uniswap</a> DEX V2 had a similar encounter, selling $1.8 million of Compound USD (<a href="https://crypto.news/price/cusdc/" data-type="link" data-id="https://crypto.news/price/cusdc/" rel="noopener noreferrer nofollow">cUSDC</a>) but receiving a mere $500 in assets. The MEV bot, which initially profited over $1 million from the misfortune, was later hacked.</p>
<p>However, the crisis that engrossed USDR on October 11 offers a unique perspective on the challenges of tokenized assets. Despite USDR’s claims of being fully backed, an analysis revealed that a mere 15% of its $45 million in assets were underpinned by the liquid project token, <a href="https://www.coingecko.com/en/coins/tangible" data-type="link" data-id="https://www.coingecko.com/en/coins/tangible" target="_blank" rel="noopener noreferrer nofollow">TNGBL</a>.</p>
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   <p lang="en" dir="ltr">Why USDR depegged despite being fully backed: Using Illiquid asset backing liquid Asset<br><br>– USDR is 100% backed. 50% of them come from stablecoins and the remaining comes from Real-Estate<br><br>– When there is a bank-run (Huge Redemption of USDR), the Stablecoin liquidity in the… <a href="https://t.co/xOrsa5gpKU" target="_blank" rel="noopener noreferrer nofollow">https://t.co/xOrsa5gpKU</a> <a href="https://t.co/OYhQ0twUUd" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/OYhQ0twUUd</a></p>— Tom Wan (@tomwanhh) <a href="https://twitter.com/tomwanhh/status/1712379528138633327?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">October 12, 2023</a>
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<p>The bulk of its backing came from the relatively illiquid, tokenized real-estate assets. Tom Wan, a seasoned analyst, shed light on the fact that these <a href="https://crypto.news/learn/how-does-tokenization-work/" data-type="link" data-id="https://crypto.news/learn/how-does-tokenization-work/" rel="noopener noreferrer nofollow">tokenized assets</a>, minted based on the ERC-721 standard, lacked the flexibility of fractionation, thus hampering liquidity creation for redemptions.</p>
<p>Additionally, the physical properties underpinning these tokens couldn’t be rapidly sold, rendering the Real USD Treasury unable to fulfill redemption requests, thereby further eroding investor trust.</p>
<p>Read more: <a href="https://crypto.news/nigeria-considers-digital-exchanges-for-asset-backed-tokens/" rel="noopener noreferrer nofollow"> Nigeria considers digital exchanges for asset-backed tokens </a></p>

$131k USDR stablecoin trade results in $0 during value fluctuation

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