These stablecoins, TRON’s USDD, and Waves’ USDN have been seen de-pegging as the broader crypto market takes a downward turn.
Given that they are algorithmic stablecoins that act similarly to UST, the two tokens have gained increasing interest following the recent collapse of TerraClassicUSD.
South Korea crypto exchange warn investors on USDD and USDN risks
Upbit, South Korea’s largest crypto exchange, has issued a warning about the potential risks associated with TRON and WAVES’ algorithmic Stablecoins, respectively. The USDD and USDN have de-pegged from their fixed US dollar value. TRON’s USDD then dropped to an all-time low of $0.9757. While WAVES’ Neutrino USD hit its low of $0.78 back in April.
In light of current market conditions, Upbit believes that price volatility among the stable coins mentioned is likely. It also stated that its de-pegging value may rise, therefore investors in WAVES and TRX should be cautious. However, Upbit stated that it will be monitoring algorithmic stable coins and other digital assets.
The update coincides with the rising scrutiny of stablecoin among global regulators. The watchdogs are proposing bills to protect stable tokens and other cryptocurrencies. Meanwhile, the South Korean authorities have summoned the Upbit crypto exchange as part of a probe related to the historic Terra LUNA collapse.
Stablecoins stability is false
The overall market capitalization of stablecoins has dropped to $158.2 billion at the moment. USDD, the fastest-growing stable token since its collapse last month, is currently trading at an average price of 0.979. It has a total of 723 million tokens in circulation. However, TRON founder Justin Sun revealed that 700 million USDC tokens had been injected to protect the USDD’s value. Meanwhile, the TRX token has lost approximately 23% of its value in the last seven days. It is now selling at a $0.061 average price.
The WAVES’ USDN has managed to recover from its recent crash. It is, however, still trading at lower than the offered price. Its price stands at $0.96. Its team had already declared a plan to restore its dollar value.