On 18th January 2024, TrueUSD (TUSD) blames Binance launchpool for mining activities dipping But x, It is called,
Routine verification is ongoing as part of our standard operations, and any claims suggesting otherwise are false. We have seen recent community mining activity associated with the Binance Launchpool, creating short-term arbitrage opportunities.
The recent decline of TrueUSD (TUSD) has attracted significant attention in the cryptocurrency community. This event was closely linked to the activities of Binance Launchpool and resulted in the price of TUSD falling below the $1 peg to $0.97.
On January 15, 2024, a substantial sale of TUSD was observed on cryptocurrency exchange Binance, causing a significant decline in the US dollar. In the 24-hour period, traders sold more than $339.2 million worth of TUSD, compared to buy orders of $296.8 million, resulting in a net outflow of $42.3 million from the exchange.
The situation worsened when TrueUSD experienced problems with real-time verification of its reserves around January 10, leading to concerns about the stablecoin being potentially undercollateralized. These technical difficulties were identified API, prevented the provision of accurate US dollar values for its collateral assets. Additionally, on Poloniex, a cryptocurrency exchange, TUSD had been trading about 8% below its peg for several weeks, while on Binance the relatively stable price remained around $0.99.
Addressing the debugging, the TrueUSD team linked the incident to activities involving the Binance Launchpool. He observed recent community mining activities that created short-term arbitrage opportunities. Despite concerns, TrueUSD reassured users about the normality of such market dynamics and liquidity adjustments. He emphasized the smooth operation of its redemption channels and the ongoing functionality of TUSD mining and redemption services.
This phenomenon of dipping raises broader questions about the stability and transparency of stablecoins in the crypto market. In June 2023, TrueUSD temporarily halted its automated verification due to remaining discrepancies. The stablecoin issuer later announced an upgrade to its fiat reserve audit and verification system in partnership with accounting firm MooreHK. TrueUSD said their total assets held in reserve accounts were $1.93 billion.
The recent decline in the value of TUSD coincided with the introduction of FDUSD, a rival stablecoin, into Binance’s staking program. Market analysts speculate that a large number of investors sold TUSD in exchange for FDUSD to participate in Binance’s rewards programs, potentially contributing to the de-pegging of TUSD.
The depegging of TrueUSD highlights the fragility of stablecoins in volatile market conditions and the need for robust mechanisms to maintain pegs to the underlying assets. It also underlines the importance of transparency and trust in the management of stablecoin reserves, which are vital to maintaining investor confidence and the overall stability of the crypto market.
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