Recently, the crypto world experienced another startling incident. The USDR and Tangible’s native token, TNGBL, witnessed a significant drop, drawing parallels to the LUNA crash of 2022. While the team behind these tokens assured users of their recovery efforts, many holders opted to exchange their coins instead. This unexpected USDR collapse has left many wondering about the stability of other projects with similar foundations.
Disconcerting Deviation
At the time of writing, USDR, a token intended to maintain a 1:1 peg with the dollar, had plummeted to $0.53. This represents a dramatic 44.43% decline in the past 24 hours. The sudden drop has left holders of this stablecoin shocked, particularly given its seemingly strong foundations. This incident has raised questions about the stability of assets backed by the real estate market in the unpredictable crypto landscape.
Unforeseen Decline
Just days before the collapse, TangibleDAO, the team behind the yield-generating stablecoin, had boasted about new properties added to its treasury. This kind of announcement typically boosts confidence among holders and even attracts new participants due to its transparency. Yet, the sudden downfall of USDR was unforeseen. The project also boasted a value accrual system designed to bring 5% to 10% APY to USDR holders, beyond its real estate foundations.
Confounding Crashes
The TNGBL and USDR crash eerily mirrors the Terra USD [USTC] and Terral Luna [LUNA] collapse of 2022. Some crypto research specialists advised USDR holders to consider exiting their positions due to the asset’s illiquidity and the sudden disappearance of DAI support. A closer look at Tangible’s treasury revealed no DAI, with only a $6.2 million insurance fund as the remaining liquid asset. This led to speculations that the collapse might have been a prearranged rugpull, a scenario where developers disappear with the liquidity provided, leaving investors with minimal returns.
However, TangibleDAO has refuted these claims, attributing the USDR de-peg to redemptions, liquidations on its real estate asset, and panic selling. In response to the crisis, the project announced plans to liquidate its Protocol Owned Liquidity (POL) and insurance fund assets to aid affected investors. They also introduced the concept of ‘Baskets,’ a pool of tokenized real estate that would be instrumental in USDR’s redemption. Despite these efforts, many users remain skeptical, drawing parallels to the downfall of LUNA and USTC.
While the future of USDR and TNGBL remains uncertain, tools like cryptoview.io can provide users with valuable insights and data to navigate the volatile crypto market. Start now using our tools for free.
Research specialist Tom Wan also weighed in on the USDR collapse, suggesting that Tangible’s strategy of using illiquid assets to back liquid ones was flawed. According to him, the exhaustion of DAI liquidity after a massive redemption was inevitable. This further highlights the importance of prudent management and strategic planning in the volatile world of cryptocurrencies.
