Terra’s downfall has left the entire globe fearing algorithmic stablecoins. However, the confident Justin Sun decided to take a chance with USDD, Tron Foundation’s “over collateralized decentralized stablecoin.” The entire crypto market has been hounded by bears.
With the entire market bleeding, investors look at stablecoins for relief, however, USDD went on to lose its peg to the U.S dollar on Monday. Several exchanges noted that the stablecoin had dipped down to a low of 91 cents. This temporary dip brought back nightmares to many from the collapse of Terra’s UST.
South Korea extensively probed the entire Terra fiasco and held an array of them accountable. It seems like exchanges in the region were trained for potential crashes in the crypto-verse. As a result, Tron’s USDD fell into the radar of certain exchanges. Upbit, one of South Korea’s largest crypto exchanges decided to address the de-pegging of USDD.
Turns out Tron’s stablecoin wasn’t the only one. Another algorithmic stablecoin pegged to the US dollar and backed by the crypto WAVES, Neutrino USD [USDN] also lost its peg. Therefore, Upbit, in a recent blog post warned its users about the aforementioned stablecoins.
The exchange wrote,
“Currently, there is a concern that the pegging of USDN and USDD is not going well. As a result, the possibility of price fluctuations of WAVES and TRON (TRX) associated with each of the above stable coins may increase, so please be careful about investing in WAVES and TRON (TRX).”
In addition to this, the exchange urged its users to stay cautious about the “increased price volatility if the de-pegging phenomenon intensifies in the future.”
Upbit assured the community that it would continue keeping an eye on these algorithmic stablecoins.
Will algorithmic stablecoins like USDD cease to exist in South Korea?
Upbit has been closely working with the South Korean government following Terra’s collapse. While stringent laws pertaining to the listing process of cryptocurrencies have already taken the front stage, the government is still coming up with other regulations. Even Litecoin [LTC], one of the oldest cryptocurrencies was ousted from several exchanges following its MimbleWimble integration.
Meanwhile, Upbit’s recent notice got the community speculating about the demise of algorithmic stablecoins in South Korea. During press time, USDD was trading for $0.9814 while USDN was priced at $0.96.