In the volatile realm of cryptocurrency, TrueUSD (TUSD), a notable stablecoin anchoring a market cap of over $3.1 billion, faced a moment of unsettlement. On November 22, the coin experienced a jarring yet brief depeg from its usually steadfast one-to-one exchange rate with the US dollar. The value of TUSD momentarily waned to $0.9976, a departure from its peg that introduced uncertainty among its users.
The disruption found its roots in an unusual flurry of sell orders, with the blockchain analytics experts at Kaiko pointing to particularly large transactions that catalyzed the dip. Among these, a standout $3 million order rippled through the market, testing the stablecoin’s resilience. Holders of TUSD felt the sting of this slip, with redemptions briefly yielding an unfavored rate below unity—a noteworthy glitch in a system designed for predictability and parity against the dollar collateral.
This incident has illuminated the delicate dance between liquidity and the sizable orders’ capability to unbalance the market, allowing for slippage – a deviation from expected pricing. TUSD enjoys prominence among exchanges, especially Binance—an exchange noted for its exclusion of competing stablecoin USDC in 2023, thereby hiking TUSD’s trading volume owing to its preferential pairing with high-profile cryptocurrencies like Bitcoin.
However, the untethered moment for TrueUSD follows closely on the heels of deeper security inquiries that surfaced in the prior month. Mid-October bore witness to contentions surrounding TUSD’s mintage address when an unassociated token, TEURO, was brought into existence from the same source. This incident cast doubt over the integrity of the private keys associated with TrueUSD, further tangled by connections to TCNY, another spurious token linked to TUSD’s address. These events unfurled a tapestry of concern amongst crypto enthusiasts, prompting a critical examination of the stablecoin’s underlying defenses.
TrueUSD has countered the rising tide of scepticism with reassurances about the safety of its smart contracts, touting increased control over the TUSD minting contract since the close of 2020. Astonishingly, in early May 2023, the stablecoin diverged from its peg yet again. This time, TUSD ascended to a peak of $1.20 across several exchanges, particularly Binance, with analysts linking the change to heightened transactions in the SUI farming pool.
Such fluctuations are not unique to TrueUSD in the grander landscape of cryptocurrency. Earlier in March 2023, the crypto community bore witness to the depegging of two of the largest stablecoins, USDC and DAI. A scurry of anxious reactions trailed their valuation dip, but stability was eventually restored, and faith shored up by the habitual publication of attestation reports by stablecoin creators to support transparency and trust.
Despite the challenges confronting cryptocurrencies, the assiduity of issuers and the unwavering interest of investors continue to fuel the dynamic and ever-evolving blockchain space – a testament to the unstoppable march of technological innovation and financial exploration.