The real estate-backed stablecoin, USDR, experienced a dramatic drop in value on October 11, with the price plummeting to a concerning $0.53 per token. This unexpected turnaround occurred after the USDR treasury experienced a wave of redemptions, resulting in a significant decrease in its liquid assets, especially Dai.
From Stability to Sales
Managed by the Tangible protocol, the essence of USDR lies in its backing – a complex blend of real estate assets and cryptocurrencies. This decentralized finance initiative is rooted in the ambitious goal of tokenizing tangible assets such as housing. The decentralized exchange platform Pearl, operating on the Polygon network, is the primary trading platform for USDR.
However, the market experienced a frenzy when a cascade of redemptions led to the exhaustion of USDR’s Dai treasury. This triggered an alarming decrease in its market capitalization, prompting panic selling. At around 1:30 PM, the value of USDR plummeted to a meager $0.5040, though it slightly recovered to around $0.53 shortly after.
A Glimmer of Hope Amidst the Chaos
Despite the alarming 50% depreciation in value, the developers behind the project remain steadfast. They are determined to address the issue and attribute the sudden drop to a temporary liquidity problem. They have emphasized that the digital assets and real estate supporting USDR remain intact and will be crucial in supporting the redemption process. Furthermore, at midnight, the official Tangible platform maintained that the assets supporting the token exceed its total market capitalization.
Examining the details of the collateral, 14.74% is anchored in the Tangible tokens (TNGBL), intrinsic to the stablecoin’s ecosystem. The substantial balance of 85.26% is said to be backed by real-world housing and a designated “insurance fund.”
