This morning, the stablecoin USDC has lost its link to the US dollar. USDC issuer Circle has lost part of USDC’s collateral due to the bankruptcy of a major US bank. The fear is now also affecting some other stablecoins.
MakerDAO’s DAI is losing value
MakerDAO’s stablecoin DAI is also the lost link with the dollar. At the time of writing, the coin is only worth between 93 and 92 dollar cents, 6 to 7% less than intended. The absolute low point for this coin was even about 13% lower than 1 dollar.
Where USD Coin (USDC) collateral consisted exclusively of dollars from regulated banks and short-term US government bonds, the collateral of DAI is a lot riskier, if data from Statistics from last year is still accurate. The collateral of DAI consists entirely of cryptocurrencies. Just over half of this is USDC, with the rest made up of ethereum (ETH), USDP, bitcoin (BTC), and other tokens.
Ook USDD and FRAX stablecoins become unstable
In addition to DAI, USDD has also crashed. This stablecoin belongs to Justin Sun’s Tron, and has been hugely controversial since its inception. Just like Terra’s UST, the token is an algorithmic stablecoin and was unveiled just after the Terra fiasco. Dates from CoinGecko shows that this token is also only
USDD also has volatile collateral. According to the website has the token USDC, USDT, BTC and Tron’s own TRX as collateral. In total, the collateral currently has a total value of 158% of all outstanding USDD, but at the end of last year this was still about 200%.
FRAX is even more extreme. This token is part “classic stablecoin” and part algorithmic stablecoin. This token is also according to CoinGecko only worth 90 cents instead of 1 dollar.