TrueUSD (TUSD) Depegs To $0.9712, Here’s Why

TrueUSD (TUSD) recently experienced a significant de-pegging, plummeting to $0.9712 from its stable value. This comes after TUSD earlier dropped to $0.98. The root cause of the stablecoin’s plunge can be traced back to Binance‘s announcement on Monday, January 15.

Why Did TrueUSD Depeg To $0.97?

On Monday, Binance announced plans for farming Manta (MANTA) tokens by staking BNB and FDUSD in its latest Launchpool. It excluded TUSD, which had earlier been a staking option for all Binance Launchpools. This prompted holders to swiftly offload their TUSD holdings.

In addition, Binance trading revealed that sizable TUSD orders were executed by whales, which acted as a primary catalyst in the de-pegging. Over the past three days, a staggering $337 million inflow was recorded, signaling a substantial sell-off by these influential players.

Furthermore, on-chain data further highlights the tumultuous journey of TrueUSD. The circulating supply witnessed a drastic 43% reduction, plummeting by 1.4 billion TUSD in just two months. Moreover, data from Arkham shows that Binance wallets hold 1.7 billion TUSD, representing a whopping 90.4% of the circulating supply.

The aftermath of the depegging saw a dormant whale, who was inactive for approximately 560 days depositing 2.5 million TUSD into Binance. It might be a move to relocate his investment into other stablecoins. Whilst, in a bid to rectify the situation, whales, including prominent figure Justin Sun, initiated efforts to stabilize TrueUSD.

The whale ‘TT2T17’, suspected to be Justin Sun, burned 104 million TUSD after the de-pegging. Additionally, he deposited 200 million USDT into Binance and withdrew 139.56 million TUSD. Whale “TGiwro” followed suit by withdrawing 31.6 million TUSD from Binance, depositing it into JustLend. He then borrowed 18.97 million USDT from JustLend and deposited it into Binance.

Also Read: Binance Delists BTC, ETH, BNB Spot Trading Pairs But Here’s The Catch

About TUSD Reserves & Recovery After Depeg

Analyzing the reserves, the collateral ratio stands at 101.16%, with TUSD supply amounting to $1.9 billion. Moreover, the escrowed collateral of $1.93 billion includes significant holdings in US Treasury Bills, First Digital Trust Limited, and USD Cash.

At press time, the TrueUSD price was seen nearing its stable value of $1. It traded at $0.9905, gaining 0.35% in value on January 18. Whilst, its market cap stood at $1.89 billion. Moreover, its 24-hour trade volume soared by 50.43% to $412.38 million.

On the other hand, First Digital USD (FDUSD), TrueUSD’s rival, had been trading at a premium since the Manta Launchpool. It reached a high of $1.0043 on the day the announcement was made. However, the TUSD price continued declining before stabilizing significantly today.

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