The newest depegging catastrophe in cryptocurrency might turn out better for the afflicted investors.The creator of the failed stablecoin USDR that was backed by real estate intends to sell the token’s assets and hold a redemption.Michael Slatkin, who oversees marketing for USDR issuer Tangible, said in the group’s Discord server late on Wednesday that “our focus right now is to make users whole.”
An announcement on the server states that holders of USDR would be able to exchange their badly undervalued stablecoins for a variety of cryptocurrencies, some of which represent real estate in the United Kingdom.It’s unclear how much value investors would finally receive from the redemption procedure, which could take months.USDR dropped from its $1 peg to around 50 cents this week as investors fled the token, which is backed mostly by real estate holdings. A large portion of the asset’s DAI reserves were depleted as a result.
It’s one of the first well-publicized failures in the real-world assets (RWA) subsector of the cryptocurrency markets, whose supporters seek out various ways to tokenize more conventional investments like treasuries and real estate.As of press time, the $45.5 million USDR that was in circulation was trading at a 44% discount.According to the initiative, the real estate assets that made up 78% of USDR’s support also gave its investors returns of up to 16%.It was claimed that this made the stablecoin more desirable than more widely used dollar-pegged assets like Circle’s USDC.
But it also increased the level of risk.The vast majority of Circle’s stablecoin reserves are held in extremely safe and liquid short-term Treasury bonds.One investor claimed that USDR’s more speculative, illiquid real estate assets cannot be sold swiftly to meet the conditions similar to a bank run that occurred this week.According to Slatkin’s remark, Tangible, which specializes in developing such RWAs, will stop using USDR after the redemption is over.
“We tried something new, we learned from the experience, and we’ll keep building,” Slatkin said in the announcement. “New products, both announced and unannounced, will improve on what was developed for Real USD and Tangible will continue to be a leader in the category.”