A stablecoin with a market value exceeding $3.1 billion, TrueUSD (TUSD), has been observed to weaken. TUSD lost its $1 peg, with its price retreating to $0.9967. According to blockchain analysis firm Kaiko, the depegging event was attributed to a glut of sell orders.
Sell Orders Mounting on the TUSD Front
Kaiko researcher RiyadCarey pointed out that a $3 million sell order, among other large sell orders, was one of the reasons behind the stablecoin’s fall below its $1 peg. This situation resulted in TUSD users transacting with less USD. Normally, a fiat-backed stablecoin should have a collateral ratio of 1:1.
This incident has brought attention to the potential impact of large orders on liquidity. As a result, TUSD stands out as one of the most liquid stablecoins with trading pairs including leading coins like Bitcoin (BTC), despite trailing the world’s largest stablecoin by market value, Tether (USDT).
The TEURO Mystery
This price movement occurred a few weeks after concerns about TUSD’s security emerged. In mid-October, a miner had to reject TEURO, a token distributed from the same address, raising concerns about the potential exposure of private keys related to TUSD.
Nevertheless, funds related to the fake token TEURO appeared to be linked to the distribution of another fraudulent token, TCNY, which had no connection with TrueUSD. Following these events, the community began to question the security of the stablecoin.
Even though all transactions occur on-chain, considering that a centralized institution issues TUSD, such incidents are not unexpected. Despite these challenges, the TrueUSD team continues to assert the security of their smart contracts.
In early May 2023, TUSD again lost its price peg on multiple exchanges, including Binance, but managed to surge to $1.20. This was linked to increased activity on the SUI network.
- TrueUSD depegs, sparking sell-off and concern.
- Security queries arise after TEURO token incident.
- Despite issues, TrueUSD claims contract security.