Stablecoin

Bitcoin

USDC

Billion

TrueUSD

TrueUSD (TUSD), a stablecoin with a market cap <a href="https://coinmarketcap.com/currencies/trueusd/" target="_blank" rel="noopener nofollow">exceeding</a> $3.1 billion, appears “shaky” and briefly depegged on November 22, dropping to as low as $0.9976 before restoring its peg. The temporary depeg was attributed to a deluge of selling orders, according to Kaiko, a blockchain analytics firm. 
<h2 id="tusd-briefly-depegs-large-selling-orders-rolling-through">TUSD Briefly Depegs, Large Selling Orders Rolling Through</h2> 
Riyad Carey, a researcher at Kaiko,&nbsp;<a class="editor-rtfLink" href="https://twitter.com/riyad_carey/status/1729177256554361273" target="_blank" rel="noopener nofollow">noted</a> that large sell orders, including one for $3 million, triggered the turbulence that caused the stablecoin’s price to dip below the dollar peg. This brief deviation resulted in users who redeemed TUSD receiving less USD. Ideally, any redemption of a fiat-backed stablecoin should result in a 1:1 reception of the collateral. 
<img loading="lazy" decoding="async" class="size-full wp-image-562742" src="https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559" alt="TUSD depegs on Binance | Source: Riyad Carey via Kaiko" width="1024" height="559" srcset="https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=1320 1320w, https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2023/11/F_9FYgsXwAQnH-f.jpeg?resize=1024%2C559?w=1140 1140w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1"> 
The incident highlights the potential impact of large order blocks on liquidity and the potential for slippage. TUSD, theoretically backed by USD and issued by TrustToken, is popular in Binance, an exchange that delisted USDC and 2023. 
Because of this limitation, TUSD is one of the most liquid stablecoins paired with leading coins like Bitcoin (BTC). However, despite its popularity, it trails Tether (USDT), the world’s largest stablecoin by market cap.&nbsp; 
<h2 id="the-teuro-mystery">The TEURO Mystery</h2> 
This depegging occurred a few weeks after tough security questions were raised about TUSD. In mid-October, the minter was&nbsp;<a class="editor-rtfLink" href="https://twitter.com/tusdio/status/1713774228934476217" target="_blank" rel="noopener nofollow">forced</a>&nbsp;to disclaim TEURO, a token deployed from the same address, suggesting that private keys associated with TUSD may have been compromised. 
Curiously, funds tied to TEURO, the fake token, were also linked to the deployment of TCNY, another fake token unaffiliated with TrueUSD. Following these incidents, the community began raising questions about the security of the stablecoin and, more importantly, its underlying infrastructure. 
This was expected, considering that a centralized entity issues TUSD though all transactions are on-chain.&nbsp; <a href="https://www.tradingview.com/x/Mc7Szs7X/" rel="nofollow"><img loading="lazy" decoding="async" class="size-full" src="https://www.tradingview.com/x/Mc7Szs7X/" alt="Bitcoin price trending upward on the daily chart | Source: BTCTUSD on Binance, TradingView" width="1233" height="592"></a> 
Despite these challenges, TrueUSD maintains that its smart contracts are&nbsp;<a class="editor-rtfLink" href="https://twitter.com/tusdio/status/1716377973904060592" target="_blank" rel="noopener nofollow">secure</a>. The company emphasizes that it has gained ownership of the TUSD minting contract since the end of 2020. 
In early May 2023, TUSD&nbsp;<a class="editor-rtfLink" href="https://research.kaiko.com/insights/tusd-depegs-amidst-heavy-borrowing" target="_blank" rel="noopener nofollow">depegged</a>, rising to as high as $1.20 on multiple exchanges, particularly on Binance. This was attributed to an increase in activity on the SUI farming pool.&nbsp; 
<img loading="lazy" decoding="async" class="size-full wp-image-562743" src="https://www.newsbtc.com/wp-content/uploads/2023/11/Screenshot470.png?resize=739%2C371" alt="TUSD depegging due to SUI farming | Source: Kaiko" width="739" height="371" srcset="https://www.newsbtc.com/wp-content/uploads/2023/11/Screenshot470.png?resize=739%2C371?w=739 739w, https://www.newsbtc.com/wp-content/uploads/2023/11/Screenshot470.png?resize=739%2C371?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2023/11/Screenshot470.png?resize=739%2C371?w=360 360w" sizes="(max-width: 739px) 100vw, 739px" data-recalc-dims="1"> 
Still, this is not the first time popular stablecoins have depegged. In March 2023, USDC and <a href="https://www.newsbtc.com/news/ethereum/ethereum-daily-revenue-soars-to-4-month-high/" target="_blank" rel="noopener ">DAI</a>, two of the world’s largest stablecoins, depegged, leading to widespread fear in the market. However, the team restored parity. Moreover, to improve confidence, stablecoin issuers regularly publish attestation reports.

$3.1 Billion TUSD Stablecoin Shaky, Briefly Depegs—What’s Happening?

Table of Contents

NewsBTC

Other articles published on Nov 28, 2023

Crypto Market Trends: Bitcoin’s Ascent, Solana’s Surge, and Euler Network’s 24 Hour March to $3 M...

Bitcoin eyes 18-month rally amid bullish indicators

Ripple (XRP) Needs to Exhibit These Three Moves to Go Parabolic: Analyst

With Another Crypto Exchange Charged By Regulators, Where Does That Leave Web3?

Private Digital Coins Losing Popularity, Says Singapore’s Central Bank Chief

Bybit Celebrates 5 Years of Disrupting the Game with 20 Million Users Milestone

Join our free newsletter for daily crypto updates!