TrueUSD experiences a rollercoaster journey, plunging to $0.97 before rebounding to $0.99.
Stablecoin TrueUSD has deviated from its expected value of one US dollar due to recent issues with its reserve attestation. Earlier today, the price of TrueUSD dropped to just over $0.97 per token, a 3% decrease from its expected value. However, it has since recovered most of its value and is currently trading at just under $0.99, which is approximately 99% of its expected peg. This level of deviation is not uncommon for this stablecoin.
The price instability of TrueUSD is a result of difficulties with attestations for its underlying reserves. On January 11, it was reported that the stablecoin encountered API issues and did not receive a response from the pricing source, making it unable to assign a US dollar value to its collateral assets at that specific moment.
According to the latest data, there is $1.93 billion of collateral backing $1.911 billion worth of assets, resulting in a collateralization of about 101%. The price drop was also preceded by Binance’s announcement of support for Manta farming, which involved staking both BNB and First Digital USD (FDUSD), but did not include support for TUSD on January 15.
Data from Binance shows that TUSD orders were predominantly large, suggesting that whales (large investors) were selling TUSD. On-chain data also indicates that the total circulating supply of TrueUSD decreased to 1.881 billion, a 43% decrease over the last three months, according to Lookonchain analysis.
Out of the total TrueUSD supply, 1.7 billion is held in Binance wallets, accounting for 90.4% of the circulating supply. On-chain data also reveals that a whale who had been inactive for approximately 560 days deposited 2.5 million TUSD to Binance on January 16. Additionally, an address suspected to be controlled by Justin Sun, the co-founder of Tron (TRX) with links to TrueUSD, burned 104 million TUSD after the depegging and deposited 200 million USDT to Binance before withdrawing nearly $140 million worth of TUSD.
Similarly, another whale withdrew 31.6 million TUSD from Binance and deposited it into the Tron-based DeFi protocol JustLend after the depegging. The user then borrowed nearly 19 million USDT to deposit into Binance.
The percentage of TrueUSD held by the top 10 holders decreased from 79.54% to 78.78% between January 15 and January 16. This decrease does not coincide with any significant price drop and appears to be related to reports of a security breach involving a third-party vendor, which exposed TrueUSD client data, including names and blockchain wallet addresses.
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