Real Estate-Backed Stablecoin USDR De-Pegs, Plunges to $0.53

In a recent development, the Real USD (USDR) stablecoin lost its peg to the U.S. dollar, causing its value to plummet to just $0.5.

TangibleDAO, the entity responsible for USDR, points to a liquidity issue as the cause of the stablecoin’s rapid depreciation.

TangibleDAO Cites Liquidity Issue in USDR’s Depegging

On Oct. 11, the Real USD (USDR) stablecoin lost its peg to the U.S. dollar. Within three hours of this de-pegging, USDR and its associated balance token, TNGBL, witnessed a 50% drop in market capitalization.

Issued by TangibleDAO, USDR had been backed by various Dai (DAI) stablecoins and altcoins and had a portfolio of over 250 real estate properties in the United Kingdom.

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

Following the incident, TangibleDAO responded through a statement on its official X account. The team explained that the sudden de-pegging was primarily due to a liquidity issue, emphasizing that the assets supporting USDR, real estate, and digital are still intact and will be employed to facilitate redemptions.

TangibleDAO has also indicated that they are actively working on solutions to address the liquidity issue and restore confidence in the USDR stablecoin.

USDR Plummets to $0.5

The incident came to light when DeFi users observed that all Dai (DAI) collateral was withdrawn, with houses now constituting 60% of USDR collateral. This shift prompted USDR users to swiftly trade their assets due to concerns about the lack of liquidity in this portion of the portfolio. Consequently, the price of USDR plummeted to $0.5.

According to on-chain data provided by TangibleDAO, the treasury associated with USDR currently holds zero DAI, with only a roughly $6.2 million insurance fund available to cover a circulating supply of 45 million USDR, initially valued at $45 million when pegged.

Furthermore, data from Polygon Block Explorer shows that some traders are offloading USDR in USDC trading pairs for a fraction of its value. Despite the crisis, USDR’s website continues to offer a 16% yield on USDR, with more than 60% of these rewards paid in TNGBL tokens.