Original author: Karen, Foresight News
At the beginning of this week, TUSD (TrueUSD), the top five stablecoins by market capitalization, began to show an unanchoring trend. The price gradually deviated from the anchor value of US$1. It once fell below US$0.97 today and has now risen to 0.9878 USDT.
For stablecoins, such fluctuations deserve in-depth attention and cautious response, and may trigger a series of chain reactions, triggering market panic and exacerbating market turmoil.
TUSD broke down, what’s the reason behind it?
There are traces of TUSD’s unanchoring. After Binance suspended support for TUSD in the latest two new coin mining periods, TUSD fell in response. In the past 24 hours, the TUSD/USDT trading pair on Binance had a net outflow of US$170 million, and the main net outflow on the 5th was US$280 million.
The second is FDUSDs market share capture. In late July 2023, Binance had a new stablecoin, FDUSD (First Digital USD), which was issued by the Hong Kong entity FD 121 Limited in June 2023. Since then, FDUSD has begun to seize the market share of stablecoins such as TUSD. Today, half a year after its launch, FDUSDs market value ($2.1 billion) has surpassed TUSD and become the fourth largest stablecoin.
Of the current TUSDs more than 1.9 billion native circulation, approximately 77% (1.486 billion) is located on Tron, and approximately 20% (392 million) is located on Ethereum. Among the top five TUSD holding addresses in Tron, there are three Binance wallet addresses. The total circulation of TUSD held by these three addresses alone is close to 1.3 billion, accounting for about 68% of the total native circulation of TUSD. The third largest address It is the suspected address of Sun Yuchen. In the reserve certificate updated by Binance on January 1, the TUSD reserve rate was 110.27%, the customer net balance was 1.876 billion, and the Binance net balance was 2.068 billion. The importance of Binance’s attitude towards TUSD is self-evident.
There are also Twitter users who regard Poloniexs hacking attack of more than 100 million US dollars in December as one of the driving factors causing instability in the TUSD market. However, from a time perspective, the support for this view is not strong enough or Less affected.
TrueUSD: Fluctuations are normal market dynamics and liquidity adjustments
Under this circumstance, on January 16, TrueUSD announced that accounting firm MooreHK would provide daily assurance services for TUSD and provide transparency into TUSDs reserve status and its reserve details. According to the latest reserve verification report, as of 4:30 on January 17, the TUSD mortgage rate was 101%, and the issuance and circulation on Ethereum, Tron, Avalanche, BNB Chain, and BNB Smart Chain exceeded 1.9 billion (specifically (USD 1,911,764,530.34), the total asset value in the reserve account is USD 1,933,973,826.93, including:
U.S. Treasury Bills: $1,142,679,876.50;
Dirst Digital Trust Limited： 501, 850,$000.00;
USD Cash: $289, 443, 950.43.
TUSD reserve assurance report issued by MooreHK
Among them, according to the report, the U.S. dollar-denominated collateral held in the account was agreed upon by Techteryx in agreements with a Hong Kong depository institution, a Swiss depository institution, and multiple Bahamian depository institutions for the benefit of TrueUSD token holders. The total balance held in the account. The specific company name was not disclosed. Interestingly, more than $500 million in TUSD reserve account assets are in custody with Dirst Digital Trust Limited, which happens to be the main body behind FDUSD.
TrueUSD also just responded that periodic certification is in progress. Recent adjustments to Binance’s new coin mining have created short-term arbitrage opportunities. These are considered normal phenomena of market dynamics and liquidity adjustments. In addition, TUSD exchange channels involving many banks around the world are also operating smoothly. TrueUSD is committed to further expanding its partnership with Binance. Additionally, TUSD minting and redemption services are always accessible via tusd.io.
In addition, the third largest TUSD address on Tron (starting with TT 2 T 17, marked by Aarkham as a suspected Justin Sun address) withdrew 112 million TUSD from the Binance hot wallet in the past two days. According to Lookonchain analysis, the address destroyed 104 million TUSD after TUSD was decoupled, then deposited 200 million USDT to Binance and withdrew nearly 140 million TUSD to return TUSD to the anchored state. At the beginning of TGiwro, the whale withdrew 31.6 million TUSD from Binance and deposited it into JustLend after TUSD was decoupled. It then borrowed 18.97 million USDT from JustLend and deposited it into Binance.
TUSD: From sudden emergence to challenges
According to the official website, TrueUSD was launched on Ethereum in March 2018 by California-based TrustToken (later rebranded as Archblock and a TrueFi contributor). It is a stable currency pegged to the US dollar. In 2021, TUSD has launched Avalanche and Tron one after another, and will be launched on BNB Chain in April 2023.
As early as May 2018, just after TUSD was launched, Binance launched TUSD and simultaneously opened TUSD/BNB, TUSD/BTC, and TUSD/ETH, and then gradually added TUSD trading pairs for more tokens. After BUSD encountered regulation last year, Binance launched a zero-handling fee event for TUSD orders, and also supported TUSD in new currency mining (note: support has been suspended for the latest two periods), making TUSD once the largest Bitcoin trading pair on Binance. , and rose rapidly.
In terms of market value, CoinGecko data shows that the market value of TUSD has suddenly emerged in the first three quarters of 2023, soaring from US$756 million at the beginning of the year to a peak of US$3.8 billion in October, but then began a downward trend. The current market value is US$2.1 billion. It fell about 40% in a month.
Source: CoinGecko
In terms of the ownership of TrueUSD, in December 2020, the ownership of the TrueUSD business was transferred to the Asian consortium Techteryx, which will cooperate with TRON to develop TUSD on Ethereum, TRON and other blockchain networks. Effective July 13, 2023, Techteryx will fully manage all offshore operations and services related to TUSD, including minting and redemption, customer onboarding and compliance, as well as regulation of fiat currency reserves and bank and trust relationships, however, Archblock will continue to serve U.S. customers during the transition period.
It is worth noting that the transfer of ownership to Techteryx has also caused concerns in the community. In addition, Techteryx has no official website and lacks detailed introduction information, making the community question its credibility.
The author found on the MakerDAO community forum that a member of the TrustToken team stated at the end of 2020 that Techteryx’s business covers Hong Kong, Singapore, Guangzhou, Shenzhen, Beijing and other places, involving traditional real estate, entertainment, environment and information technology industries, and the largest owner is Jennifer Ms. Jiang (also CEO). At the same time, it responded that Justin Sun does not have new ownership of Techteryx, and Techteryx has no relationship with the company that invested in Poloniex. However, we have no way of knowing who the alleged owner of Techteryx is, Jennifer Jiang.
As a lesson learned from the past, the de-anchoring of stablecoins can easily trigger a series of chain reactions such as liquidity crisis and trust crisis, bringing risks and challenges to the market that cannot be ignored. Currently, TrueUSD is also actively responding. As for the follow-up, Foresight News will continue to track it.
