Real USD (USDR), a Polygon-based stablecoin backed by real estate holdings, lost nearly 50% of its value over a few hours on Wednesday.
In a tweet on X, Tangible DAO, the team behind the project, disclosed that all the liquid DAI from the USDR treasury was redeemed over a short period of time. This accelerated drawdown in market cap, coupled with a lack of DAI for redemptions, resulted in panic selling that led to a depeg, the team said.
An update on $USDR
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
“In the meantime, this is a liquidity issue. The real estate and digital assets backing USDR still exist and will be used to support redemptions,” said Tangible DAO.
On-chain data from the team shows that there is no DAI left in the treasury, and the price of USDR sits at $0.53. The stablecoin has a market cap of $45 million and a circulating supply of 45.21 million, and currently offers a 16.39% yield.
At the moment, there is only $5.9 million worth of liquid assets in the form of an insurance fund, while around $6.6 million sits in the TNGBL token, which has lost 53% of its value over the last 24 hours.
Traders appear to be selling large quantities of USDR for USDC for a fraction of its value, according to data from the Polygon blockchain explorer Polyscan.
— Rekt Fencer (@rektfencer) October 11, 2023
Earlier this month, crypto trader Valentin Mihov warned users about farming the USDR stablecoin, labelling it a “ticking time bomb.”
“Everyone is going crazy about farming with USDR… but you need to be super careful as that stable could potentially enter a death spiral if their DAI reserves are depleted. Keep an eye on this and better get out if this number goes close to 0,” he tweeted on Sept. 1.