Quick take:
As of this writing, Falcon USD had recovered to trade at about 0.9924 on CoinMarketCap.
USDf’s has $540 million worth of stablecoins in circulation, which are backed by “diversified crypto assets.”
However, there are concerns over the quality of some of that collateral, according to reports on Tuesday.
DWF Labs-backed Falcon USD has depegged from the dollar, just months after launching the stablecoin USDf. The depegging is linked to concerns about the quality of some of the collateral backing USDf’s $540 million market cap.
The USDf stablecoin fell to 0.9783 earlier on Tuesday before bouncing back to 0.9924, according to CoinMarketCap data.
This is not the first stablecoin to depeg from the dollar this year. In April, FDUSD, the stablecoin issued by First Digital, depegged to $0.87 to the dollar after Justin Sun shared on the X platform, expressing concerns over First Digital’s ability to fulfil client fund redemptions.
The de-pegging, like USDf’s, was shortly lived with FDUSD recovering to parity.
However, USDf’s de-pegging from the dollar, hot on the heels of FDUSD’s depeg, evokes memories of the collapse of Du Kwon’s then-$18-billion algorithmic stablecoin terraUSD (UST) in June 2022.
Stablecoins are meant to be stable relative to their fiat peg, which is why their adoption in the mainstream has accelerated over the past two years, with the likes of PayPal and leading financial institutions joining the space either independently or through partnerships.
USDf’s de-pegging came after decentralised finance (DeFi) risk advisor LlamaRisk highlighted issues with USDf regarding its onboarding as collateral to the lending platform, which fell victim to a $9 million hack last month.
However, DWF Labs’ Managing Partner, Andrei Grachev, later responded to concerns about USDf’s collateral via a post on X, saying, 89% of the circulating supply is backed by stablecoins and bitcoin (BTC), with approximately 11% backed by “altcoins.”
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The post Falcon USD Recovers to $0.9924 After Depegging Earlier on Tuesday appeared first on NFTgators .
