Crypto News: TrueUSD (TUSD) Gains Ground Among Stablecoins, but Loses Dollar Peg on Binance
TrueUSD (TUSD) has surged in popularity among stablecoins, climbing to the 29th position in terms of market capitalization. Its market capitalization has grown from $755 million at the end of 2022 to $2.4 billion as of Monday, thanks in large part to Binance offering BTC-TUSD as a zero-fee trading pair.
However, TUSD lost its dollar peg on Monday, peaking at $1.20 relative to USDT on Binance. This coincided with Tron founder Justin Sun depositing more than $50 million worth of TUSD on Binance, leading to speculation that Sun was trying to farm SUI liquidity pools.
Binance CEO Changpeng “CZ” Zhao threatened Sun with legal action, and Sun then admitted someone on his team was using a portion of the funds to farm, but most were to be used for market making TUSD on the exchange.
Despite the depegging, TUSD’s increasing depth and demand due to the SUI launchpad have secured its position as a major player in the stablecoin market. However, analysts from Kaiko have noted that TUSD liquidity has not kept pace with its volumes, making a depegging like this more likely.
The move also coincided with several users on Aave and Compound borrowing large amounts of the token with organic transactions. The most common strategy was borrowing TUSD and swapping for USDC, effectively shorting TUSD from its elevated price.
However, neither Aave nor Compound have a large supply of TUSD, causing borrowing rates to surge to over 100% APR on both platforms.
Overall, TUSD’s growth and popularity as a stablecoin have made it a top contender in the market, despite recent challenges to its dollar peg.
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