Background on TrueUSD’s Recent Depegging
TrueUSD (TUSD) has recently clarified that the depegging of its value from the US dollar was linked to activities on Binance Launchpool. The TUSD team, in a statement on social media platforms, mentioned that the depegging was due to community mining activities associated with Binance Launchpool, resulting in short-term arbitrage opportunities.
The team emphasized that such activities are normal within market dynamics and liquidity adjustments. Additionally, they assured users that the redemption channels, operating with global banks, are functioning smoothly to ensure seamless transactions.
TrueUSD stands out as the first USD-pegged stablecoin to implement daily attestations for its underlying reserves.
Market Impact and Expert Views
Following the depegging incident on January 15, where TrueUSD temporarily deviated from its U.S. dollar peg, data from Binance indicated significant trading activity. Users sold around $238.3 million worth of TrueUSD via the TUSD-USDT trading pair within 24 hours, with a net outflow of $154.5 million. However, buyers also acquired approximately $83.8 million worth of TrueUSD during the same period.
Experts have suggested that the surge in Binance’s launch pool program, along with new offerings like MANTA and staking requirements, might have influenced investors to shift away from TrueUSD towards other opportunities. Justin d’Anethan, from Keyrock, mentioned that the focus could have moved from stablecoins like TUSD to participating in Binance’s program.
“Investors may have shifted their focus from stablecoins like TUSD to participate in the launch pool program.” – Justin d’Anethan
Furthermore, the impact of a security breach on Poloniex, associated with TRON’s founder, may have also affected TrueUSD’s stability. It is notable that TrueUSD has faced depegging issues in the past, like in October last year, following a suspension of minting activities through its partner, Prime Trust.
Despite challenges, TrueUSD remains the fifth largest stablecoin with a market cap exceeding $1.8 billion. The stablecoin, along with others, witnessed a decline in market cap after the TerraUST shakeup. Tether, however, has shown resilience in recovering lost market value, with its cap approaching $100 billion and market share surpassing 70% by the end of last year.
