Last week saw chaos in the cryptocurrency market due to the unprecedented crash of Terra’s UST stablecoin and LUNA. The crash resulted in traders debating about the trustworthiness of stablecoins, the latest being DEI price. This adds $DEI to other algorithmic stablecoins including UST and USDT which have also lost their peg to the dollar. Panic due to UST’s crash last week resulted in massive drop in prices of a majority of cryptocurrencies.
DEI follows UST in fresh crash
In a fresh case of stablecoin depegging from the dollar level, the$ DEI stablecoin had on Monday lost the $1 peg. DEI’s price dropped to an abysmal low of 52 cents, according to CoinMarketCap. As of writing, the stablecoin was trading at 68 cents. The current market cap of DEI is around $63 million.
Algorithmic stablecoins have an inherent ability to maintain balance with fiat currencies like the U.S. Dollar. They are often undercollateralized, which means they are not backed by enough assets in reserves to back the total value of stablecoins. An algorithm that monitors the supply and demand equation between the stablecoin itself and another coin that backs it, serves as the backbone.
DEI Price Restoration
The DEUS Finance DAO, which backs the $DEI stablecoin, provides financial infrastructure. Financial instruments, such as synthetic stock trading platforms, options and futures trading are among those offered by Deus. Earlier on Monday, it informed that their team is working on solutions to maintain stablility. They said in a tweet,
“Our team is working around the clock to restore the DEI peg. Mitigation measures were implemented immediately and solutions are being developed for long-term stability.”
Trending Stories
The decline in $DEI price comes after a UST bloodbath in the market wiping out billions of dollars of investor money last week. Another Terra cryptocurrency LUNA, which is mutually exchanged with UST, also lost more than 99% of its value as a result.
Meanwhile, the Luna Foundation Guard (LFG) revealed that the recent Terra crash and its measures to support UST had wiped out most of its reserves. Its holdings now stand at about $260 million. Less than two weeks ago, LFG had reserved of over $4 billion.
- Uniswap ($UNI) Surges 45% As Trading Fees Surpass Ethereum
- Ethereum Merge Delay? Developers Concerned Over Shadow Fork
- MINA Price Jumps By 20% Over This Announcement
- Bitcoin Mining Data Suggests More Price Dumps Ahead; Details
- This Bitcoin Bear Market Is Unlike Any Other, Here’s Why
- Here’s Why Shiba Inu Ecosystem Tokens’ Prices Are Shooting Up
- Goldman Sachs Likely to Raise $2 Billion To Acquire Celsius Assets, But Here’s the Catch
- Here’s Why SEC Chair Wants Single Rulebook For All Crypto Trading
- Huge Cardano Breakout Imminent After This Resistance Level?
- Shibarium To Launch Soon; How It Can Pump Shiba Inu Prices?
- NEAR Price Analysis: Reversal Within Channel could Sink NEAR Below $3
- Solana Price Analysis: SOL Price Rallying North With Eyes On $59
- XRP Price Analysis: Trendline Reversal Could Dump XRP Back to $0.3
- AXS Price Analysis: Rising AXS Price Aims To Reclaim $17.6 Mark
- Polygon Price Analysis: Can Trendline Breakout Lead MATIC to $0.75?
- ArbiSmart Price Analysis: RBIS Retests Multi-month Support; Buy this Dip?
- Waves Price Analysis: Emerging Pattern Threatens to Break $4.16 Support
- Apecoin Price Analysis: Trendline Fakeout Could Tumble APE by 25%
- Uniswap Price Analysis: Can Ongoing Recovery Carry UNI Price to $8?
- SHIB Price Analysis: $0.00001 Breakout Could Pump SHIB by 33%
