Real USD Stablecoin Plummets 50% as it Depegs
The Real USD stablecoin, also known as USDR, has experienced a significant drop in value, falling by 50%. USDR, which is largely backed by real estate assets, had a market cap of around $45 million before its price began to spiral downwards on Wednesday.
Reasons for Depreciation
The depegging of USDR may be attributed to a surge in redemptions. According to a Dune analytics dashboard, the stablecoin’s collateral mainly consisted of illiquid assets like real estate and liquid assets like DAI. The redemptions have resulted in the erosion of $11.8 million worth of DAI, leaving behind predominantly illiquid assets.
Undercollateralization and Unusual Backing
Excluding the project’s native TNGBL token, USDR is now undercollateralized, as reported by its dashboard. However, if the TNGBL token is taken into account, the stablecoin has a collateralization ratio of 102%. Additionally, the stablecoin’s own dashboard reveals that some of the USDR is backed by USDR itself, with 62,810 USDR listed as collateral.
Hot Take: The Risks of Stablecoins and Asset-Backed Cryptocurrencies
The depegging of Real USD highlights the risks associated with stablecoins and asset-backed cryptocurrencies. While they are designed to provide stability by being pegged to traditional assets, they can still face challenges when investors lose confidence in the underlying assets. This incident serves as a reminder that careful consideration should be given to the composition and management of collateral in order to maintain stability and prevent drastic value fluctuations.
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