USDR Stablecoin Crashes 50% After Run on Reserves

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Real USD (USDR), a stablecoin backed partly by real estate and crypto, lost its 1:1 peg to the US dollar yesterday, causing its price to fall dramatically to $0.51 in a few hours.

According to TangibleDAO, the team behind USDR, the depegging occurred after a surge in redemptions drained liquid assets such as Dai (DAI) from USDR’s Treasury reserves. This rush on reserves left insufficient liquidity to defend the peg.

In a statement, TangibleDAO said the depegging was a temporary liquidity issue, and that assets still exist to back USDR. “The real estate and digital assets backing USDR still exist and will be used to support redemptions,” the team stated.

An update on $USDR

Over a short period of time, all of the liquid $DAI from the $USDR treasury was redeemed.

This lead to an accelerated drawdown in the market cap.

Combined with the lack of DAI for redemptions, panic selling ensued, causing a depeg.

We’re working on…

— Tangible 🏠💙 (@tangibleDAO) October 11, 2023

However, the project’s dashboard currently shows a backing ratio of 92.4% or 75% if you exclude the project’s native token TNGBL (14.4%), and the insurance fund (2.97%).

TangibleDAO has vowed to compensate users, announcing plans to discontinue USDR and redeem outstanding tokens. The team will utilize protocol-owned liquidity, and insurance funds, and introduce tradeable real estate asset tokens to aid the wind-down process. Liquidation of real estate assets may be used as a last resort if difficulties arise.

USDR currently trades at $0.53 on Polygon’s Pearl decentralized exchange.

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