Traders took advantage of TrueUSD's (TUSD) depegging event to capture a potential 20% gain by borrowing TUSD on Aave and Compound and quickly swapping it for USD Coin (USDC) to effectively short TUSD from its elevated price. However, borrowing rates on both protocols hit over 100% annualized due to the lack of TUSD liquidity.
The depegging was likely caused by the lack of liquidity backing its intended $1 peg, despite Binance promoting TUSD and making it one of the highest-volume pairs in all of crypto. Binance has shied away from its own stablecoin, BUSD, which faced regulatory troubles earlier this year. TUSD has quickly gained adoption on Binance, with Bitcoin trading volumes paired with the token exceeding $1 billion in the past 24 hours.
All Comments