TrueUSD (TUSD) Explains Depegging Incident
TrueUSD (TUSD) has provided clarification regarding the recent depegging incident, stating that it is linked to activities on Binance Launchpool. The TUSD team has observed community mining activities on Binance Launchpool that have resulted in short-term arbitrage opportunities. They consider these activities to be normal within market dynamics and liquidity adjustments. TUSD reassures users that their redemption channels, involving global banks, are functioning smoothly, ensuring seamless transactions. The team also expresses dedication to expanding collaboration with Binance, emphasizing that TUSD minting and redemption services are always accessible.
Depegging Occurred on January 15
The depegging incident took place on January 15 when TrueUSD briefly fell below its U.S. dollar peg. According to data from Binance, approximately $238.3 million worth of TrueUSD was sold within 24 hours, resulting in a net outflow of around $154.5 million. However, traders also purchased about $83.8 million worth of TrueUSD during the same period. Earlier reports suggested that TrueUSD had paused real-time attestations of reserves, raising concerns about collateralization. The company later clarified that internal errors caused the incident and announced a full upgrade of its fiat reserve audit system.
Binance Launchpool Popularity Influenced TUSD Sell-Off
Experts believe that the popularity of Binance’s launch pool program, particularly the introduction of MANTA and the staking requirements of BNB or FDUSD, may have influenced investors to sell off TrueUSD in favor of these options. Justin d’Anethan from Keyrock suggests that investors shifted their focus from stablecoins like TUSD to participate in the launch pool program. Additionally, TrueUSD may have been affected by the recent security breach on Poloniex. This is not the first time TUSD has lost its dollar peg, as it experienced a similar incident in October last year.
Conclusion: TUSD’s Market Position
TUSD currently holds a market cap of over $1.8 billion, making it the fifth largest stablecoin behind USDT, USDC, BUSD, and DAI. Like other stablecoins, TUSD faced a significant decline in market cap following the collapse of TerraUST. However, Tether has managed to regain its lost market value and now has a market cap approaching $100 billion.
Hot Take: TUSD Addresses Depegging Issue Related to Binance Launchpool
TrueUSD (TUSD) has clarified that the depegging incident it experienced was linked to activities on Binance Launchpool. The team assured users that their redemption channels are functioning smoothly and expressed dedication to expanding collaboration with Binance. The depegging occurred on January 15 and may have been influenced by the popularity of Binance’s launch pool program. Despite this incident, TUSD remains one of the top stablecoins in terms of market cap.
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