Compound

Uniswap

Real USD

Coin

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 <p class="is-style-lead">During a recent <a rel="noopener noreferrer nofollow" title="fluctuation" href="https://thebittimes.com/tag/fluctuation.html">fluctuation</a> in USDR’s value, a transaction involving 131k <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>s yielded no return for the trader.</p>
 <p>Following the startling revelation from yesterday’s events surrounding the real-estate-backed U.S. dollar <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>, Real USD (USDR), a trader encountered a grave setback by swapping a staggering 131,350 USDR for 0 USD Coin (USDC). 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 <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a> USDR, this guy accidentally swapped 131,350 $USDR for 0 $USDC while panic selling $USDR.<br><br>And a MEV bot successfully arbitraged $107K.https://t.co/FHOJtaGcSDhttps://t.co/IYtoqar29N pic.twitter.com/USLF1qkVDK</p>— Lookonchain (@lookonchain) October 12, 2023
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 <p>The data, sourced from the prominent blockchain analytics firm Lookonchain, 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>
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 <p>These vulnerabilities are not unprecedented in the crypto world. Last year, a trader navigating the Uniswap DEX V2 had a similar encounter, selling $1.8 million of Compound USD (cUSDC) 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 <a rel="noopener noreferrer nofollow" title="Category Analysis" href="https://thebittimes.com/analysis.html">Analysis</a> revealed that a mere 15% of its $45 million in assets were underpinned by the liquid project token, TNGBL.</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… https://t.co/xOrsa5gpKU pic.twitter.com/OYhQ0twUUd</p>— Tom Wan (@tomwanhh) October 12, 2023
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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 tokenized assets, 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>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/131k-usdr-stablecoin-trade-results-in-0-during-value-fluctuation-tbt66174.html">https://thebittimes.com/131k-usdr-stablecoin-trade-results-in-0-during-value-fluctuation-tbt66174.html</a></p>

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

TheBitTimes

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