Stablecoin Holder Loses Over $100,000 After Panic Selling USDR
A stablecoin holder lost more than $100,000 after panic selling USDR, a stablecoin issued on the Polygon network. The holder swapped 131,350 USDR for zero USDC, allowing an MEV bot to claim a profit of $107,000. The incident was revealed by Lookonchain, a blockchain tracking platform.
The Depegging of USDR
USDR is issued by Tangible protocol, a DeFi platform that tokenizes real-world assets like housing. Due to the immutable nature of the Polygon network, the USDR holder is now at a loss.
USDR Falls to $0.50
By the end of October 11, USDR was trading at around $0.53 against the USD, experiencing a nearly 50% drop. This triggered panic among holders. The team behind USDR explained that the stablecoin fell as low as $0.50 before recovering.
Tangible Finance’s Recovery Plan
Tangible Finance, the issuer of USDR, stated that it is working on a recovery plan to compensate holders for their losses. The company attributed the crisis to liquidity issues and reassured holders that the real estate and digital assets backing USDR still exist and will be used to support redemptions.
The issuer also emphasized its commitment to its users and shared its plans for the future:
“Tangible isn’t going anywhere. We have a flywheel that works and plans to continue building within that. A critical part of our shared future success is maintaining the trust we’ve established with our users over the past year, which we hope to maintain through the plan below.”
Extent of the USDR Depegging
Aside from the panic selling incident, the full extent of the USDR depegging has yet to be determined. As of October 12, there are over 2,400 USDR holders who collectively control slightly over 45.5 million of the stablecoin.
Hot Take: USDR Holder’s Loss Highlights Risks in Stablecoin Trading
The case of the USDR holder losing over $100,000 due to panic selling serves as a reminder of the risks involved in trading stablecoins. The incident highlights the vulnerability of stablecoins to market fluctuations and the potential for malicious actors to exploit such situations. It also underscores the importance for issuers to have robust liquidity measures and recovery plans in place to protect their users’ investments.
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