Polygon-Based Stablecoin Real USD ($USDR) Loses Half Its Value
A real estate-backed stablecoin called Real USD ($USDR) has experienced a significant drop in value after its liquid collateral was drained. The stablecoin, which operates on the Polygon network, is backed by rental properties in the UK. According to on-chain data from the Tangible decentralized autonomous organization (DAO), the $DAI reserves of the protocol were completely depleted, leaving only $6 million in its insurance fund to back over 45 million USDR tokens.
Liquidity Shortage Impacts Tangible’s Native Token
In addition to the stablecoin, the protocol’s native token, TNGBL, also suffered a decline in value due to a liquidity shortage. Large token holders found it difficult to sell their tokens, as the bid depth on Uniswap was below $5,000.
Selling USDR Tokens at Steep Discounts
As a result of the crisis, some USDR token holders decided to sell their holdings for USDC stablecoin at discounted prices. One trader accidentally swapped 131,350 USDR for 0.00000000045 USDC, resulting in a loss of approximately $131,369. In another transaction, a maximal extractable value (MEV) bot profited $107,000.
Real USD Still Backed by UK Rental Properties
Despite the depegging and subsequent drop in value, USDR is still backed by a number of rental properties in the UK. Tangible’s website provides information about these properties and their association with the stablecoin.
Tangible Protocol Tokenizes Real-World Assets
Tangible is the protocol behind Real USD and allows for the tokenization of real-world assets on the blockchain. The platform’s marketplace offers a range of items such as gold bars, fine wines, and luxury watches that can be purchased using USDR stablecoin. Each item is accompanied by a tangible NFT (TFNT) that represents ownership and can be exchanged or redeemed for the physical asset.
Hot Take: Real USD’s Plummeting Value Raises Concerns
The drastic drop in value of Real USD ($USDR) raises concerns about the stability and security of real estate-backed stablecoins. This incident highlights the risks associated with relying solely on liquid collateral to support a digital asset. While USDR is still backed by UK rental properties, the loss in value and liquidity shortage have impacted token holders. It remains to be seen how Tangible and other similar protocols will address these challenges and restore confidence in their stablecoin offerings.
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