Small-cap Stablecoins Struggle to Maintain Peg as Crypto Market Crashes
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.
The development follows a depeg seen by Terra (LUNA)'s decentralized stablecoin UST, which seems to have placed the entire market into jeopardy. At 10:30 UTC, UST was down 17.5% to USD 0.4.
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
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