USDR, a stablecoin backed by real estate and cryptocurrencies, has experienced a loss of its peg to the U.S. dollar due to significant redemptions that depleted liquid assets, particularly Dai. The stablecoin is issued by Tangible Protocol, a decentralized finance project aiming to tokenize real-world assets, primarily real estate. USDR is predominantly traded on the Pearl decentralized exchange, operating on the Polygon network.
The loss of peg occurred when a surge in redemptions rapidly depleted all the liquid Dai in the USDR vault. This liquidity crisis, compounded by a lack of Dai available for redemptions, led to panic selling and the consequent decoupling of USDR from its $1 peg. At around 11:30 AM UTC, USDR experienced heavy selling pressure, causing its price to plummet to $0.5040 per coin, resulting in nearly a 50% loss in value. However, the project's developers emphasized that this was a liquidity issue, and the underlying real estate and digital assets supporting USDR remained intact for redemption purposes.
The USDR's official website further assured that the value of its assets still exceeded the token's entire market capitalization, highlighting the resilience of its collateral. Approximately 14.74% of USDR's collateral is represented by tangible (TNGBL) tokens, integral to the token's native ecosystem, while the remaining 85.26% is backed by real-world real estate holdings and "insurance funds." Stablecoins typically aim to maintain a 1:1 peg with the U.S. dollar but may experience deviations during extreme market conditions. Notably, other stablecoins like USDC and Terra's UST have faced similar challenges in the past but eventually regained their peg.
