On January 15, TrueUSD (TUSD), the USD-pegged stablecoin, experienced a deviation from its $1 parity that saw its price decline to $0.985.
This comes amidst speculations that TrueUSD holders are exchanging hundreds of millions of tokens for the competing stablecoin Tether (USDT).
TrueUSD Depeg Sparks Trading Frenzy on Binance
Based on data from the exchange’s trading page, TUSD experienced a total inflow of $301.54 million in the past 24 hours, with outflows amounting to $147.77 million.
Several market experts have linked the sell-offs caused by whales and market dynamics to the loss of parity by TrueUSD. The stablecoin’s value declined gradually over the past two weeks, dropping from $1 to $0.985.
This marks the second significant decline against the USD for TUSD within the last two months, with the stablecoin falling to $0.988 in November 2023.
TrueUSD has also been struggling to provide real-time attestations of its reserves. These concerns, which suggested the stablecoin was undercollateralized, first emerged on January 10.
A recent report by Protos also revealed that the system encountered multiple API errors, resulting in the inability to provide a U.S. dollar value for its collateral assets.
Pseudonymous X user Rho Rider first highlighted TUSD’s problems on December 16, pointing to a potential arbitrage trade for the stablecoin.
⚠️ $TUSD continues its march down off the Peg on Poloniex, while market cap dives
It’s doing ~$3M/day volume on there (prob wash traded). Meanwhile the price on Binance remains fairly steady.
— Rho Rider (@RhoRider) December 16, 2023
TUSD had been trading nearly 8% below its peg at $0.92 on Poloniex while maintaining a steadier price of around $0.99 on Binance.
“The big [question] is why isn’t anyone taking the nearly 10% arb?” asked Rho.
However, the arbitrage trade seemed impossible as users were reportedly unable to withdraw or deposit TUSD on Poloniex.
Exclusion from Binance’s MANTA
Binance recently revealed Manta as its 44th Launchpad project but notably excluded TUSD from the list of cryptocurrencies eligible for staking to earn MANTA. Instead, BNB and FDUSD were chosen to participate in the project.
The omission of TUSD from this selection appears to have triggered a reaction from users, resulting in a decline in TUSD’s price to $0.985 following the sell-off.
Several users on X have also suggested that the significant sell-off may be linked to TrueUSD’s exclusion from Binance’s Manta launch pool initiative.