Real USD (USDR), a Polygon-based stablecoin backed by real estate assets, has lost its US dollar parity, causing its price to drop by 50%. The stablecoin currently trades at 52 cents, according to CoinStats.
Issued by Tangible protocol, USDR is a stablecoin backed by illiquid assets like real estate and liquid assets like DAI. Tangible offered investors a yield of 8-15% per year on their USDR holdings. The stablecoin, which had a market cap of around $45 million, started crashing on Wednesday.
What Happened?
Tangible explained on X (formerly Twitter) that the depeg was caused by a liquidity issue. The project stated that all of the liquid DAI from the USDR treasury was redeemed over a short period, leading to an “accelerated drawdown” in USDR market cap.
Tangible noted that in addition to the lack of DAI available for redemptions, “panic selling ensued,” causing USDR to lose its USD parity.
“In the meantime, this is a liquidity issue. The real estate and digital assets backing USDR still exist and will be used to support redemptions,” Tangible tweeted.
USDR treasury now contains zero DAI. Excluding Tangible’s native token, TNGBL, the stablecoin is now undercollateralized. However, with TNGBL included, USDR has a collateralization ratio of 102%. According to its dashboard, some USDR is backed by itself, with 62,810 USDR listed as collateral.
Way Forward
Tangible released a follow-up tweet on Thursday, detailing a plan of action to make users whole. These include redeeming and liquidating the protocol owned liquidity (POL) and insurance fund, launching tokenized real estate pools, and allowing users to redeem their USDR for a share of the tokenized real estate pools.
The decentralized finance (DeFi) project stated that it will no longer develop or support USDR once these measures are implemented.
“Tangible’s future will not include Real USD. USDR will be deprecated once the redemption process shared above is complete,” the project said.
