Some smaller-cap stablecoins are struggling to maintain their targeted peg, which is mainly USD 1, amid a huge bloodbath in crypto that has wiped off billions from the market.
Notably, algorithmic stablecoins have been hit the most. For one, Neutrino USD (USDN), an algorithmic stablecoin within the Waves blockchain ecosystem that aims to maintain a USD 1 peg, has been distancing from its peg. Currently, the coin is trading at USD 0.77, down by 17.6% over the past 24 hours.
Likewise, sUSD (SUSD), a synthetic stablecoin asset on Synthetix (SNX), the value of which tracks that of the US Dollar and has a circulating supply of over USD 110m, has lost 4% over the past day, dropping to USD 0.949.
Other fiat-backed stablecoins have also fluctuated wildly. BiLira (TRYB), a stablecoin backed by the Turkish Lira, has dropped 0.6% to USD 0.063, while Zasset zUSD (ZUSD), a programmable dollar-backed stablecoin, has plunged to USD 0.89, down by 5.6%.
Meanwhile, some in the cryptoworld argued that Tron (TRX)’s recently-launched algorithmic stablecoin USDD is also struggling to keep its peg. According to a recent tweet by Tron founder Justin Sun, however, the stablecoin is trading between USD 0.995 to USD 1.005 on the Poloniex exchange. Per CoinGecko, it currently trades at USD 0.99 and has generally been trading around USD 1 over the past week.
Aside from the small-cap stablecoins, tether (USDT), the largest stablecoin with a circulating supply of over USD 82.7bn, had also slightly distanced from its intended USD 1 peg as investors are redeeming USDT tokens to fiat currency at an unprecedented rate – before regaining its peg. It’s currently trading at USD 1, according to CoinGecko.
Some in the crypto community voiced concern that a USDT depegging could be catastrophic for the industry, which is already bleeding hard from the collapse of a much smaller stablecoin.