TUSD Stability Shaken by Large Selling Orders
TrueUSD (TUSD), a stablecoin with a market cap exceeding $3.1 billion, experienced a temporary depeg on November 22. The price of TUSD dropped to as low as $0.9976 before recovering its peg. This deviation was caused by a flood of selling orders, including one worth $3 million, according to blockchain analytics firm Kaiko. As a result, users who redeemed TUSD received less USD than expected.
This incident highlights the impact of large order blocks on liquidity and the potential for slippage. Despite its popularity and liquidity on exchanges like Binance, TUSD still lags behind Tether (USDT), the world’s largest stablecoin by market cap.
The Mystery Surrounding TEURO
A few weeks prior to this depegging event, concerns about the security of TUSD were raised. The minter had to disclaim TEURO, a token deployed from the same address, indicating potential compromise of the private keys associated with TUSD. Additionally, funds tied to TEURO were also linked to another fake token called TCNY.
These incidents have led to questions about the security and underlying infrastructure of TUSD, which is issued by a centralized entity but operates on-chain.
Stablecoin Depaggings Not Uncommon
This is not the first time popular stablecoins have experienced depegging. In March 2023, both USDC and DAI depegged, causing widespread concern in the market. However, the teams behind these stablecoins were able to restore parity. To improve confidence in stablecoins, issuers regularly publish attestation reports.
Hot Take: TUSD Faces Challenges in Maintaining Stability
TrueUSD (TUSD) has encountered a significant hurdle in maintaining its peg to the US dollar. Large selling orders triggered a temporary depegging event, highlighting the impact of liquidity and slippage on stablecoins. The security concerns surrounding TUSD, including the disclaiming of TEURO and the link to another fake token, have raised doubts about its underlying infrastructure. While stablecoin depeggings are not uncommon, they can still create fear in the market. TUSD will need to address these challenges to regain confidence and maintain stability in the future.
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