Stablecoin TrueUSD Falls Below $1 Peg Due to Reserve Attestation Issues
The stablecoin TrueUSD (TUSD) has experienced a drop in value, falling to just over $0.97 per token, which is 3% lower than its expected value of one US dollar. However, it has since recovered and is currently trading at just under $0.99. This deviation from its peg is not uncommon for TUSD.
Difficulties with Attestations and Binance Support
The instability in TrueUSD’s price can be attributed to recent issues with the coin’s reserve attestations. API problems and lack of response from pricing sources have made it difficult to assign a US dollar value to the collateral assets at certain moments. Currently, the collateral backing amounts to $1.93 billion for assets worth $1.911 billion, resulting in a collateralization of approximately 101%.
In addition, Binance’s support for Manta farming without TUSD support may have contributed to the fall in value.
Whales Selling TUSD and Circulating Supply Decrease
Data from Binance suggests that large orders for TUSD indicate whales selling the stablecoin. On-chain data also reveals a 43% decrease in the total circulating supply over the past three months, with 1.7 billion TUSD held on Binance wallets, accounting for 90.4% of the circulating supply.
Notable transactions include a whale depositing 2.5 million TUSD to Binance after a long period of inactivity and Tron co-founder Justin Sun burning 104 million TUSD and depositing 200 million USDT to Binance.
Top Holders and Security Breach
The percentage held by the top 10 holders of TrueUSD decreased slightly from Jan. 15 to Jan. 16, likely unrelated to the price dip. Reports of a security breach involving a third-party vendor exposed TrueUSD client data, including names and blockchain wallet addresses, which may have affected investor sentiment.
Hot Take: TrueUSD Struggles with Stability Amidst Attestation Issues and Whales Selling
The stablecoin TrueUSD has faced challenges maintaining its peg to the US dollar due to difficulties with reserve attestations and selling pressure from large holders. These issues have resulted in deviations from its expected value, with the token experiencing recent dips in price. Additionally, concerns over a security breach affecting client data have further impacted investor confidence. As TrueUSD works to address these challenges and improve stability, it will be important for users to monitor developments closely and consider the potential risks associated with investing in this particular stablecoin.
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