Real USD (USDR), a Real Estate-Backed Stablecoin, Depegs 50%

Real USD (USDR), Backed by Real Estate, Depegs 50% Amidst Mass Withdrawals

On the evening of October 11, 2023, Real USD (USDR), a stablecoin issued by TangibleDAO and backed by real estate assets, experienced a significant depeg, losing nearly 50% of its value. According to TangibleDAO's website, USDR is "a new form of money backed and supported by real estate, offering an annual yield of 8-15%."

Market Impact

Before the depeg, Coingecko data indicated that USDR had a market capitalization of approximately $45 million, with its value consistently pegged around $1 USD. As of the time of writing, the market capitalization has dropped to just over $41 million, with USDR's value plummeting to $0.5065 USD.

24-hour chart showing USDR's value drop on Coingecko, captured at 12:05 AM on 12/10/2023

What Caused the Depeg?

Stablecoins are digital currencies pegged to stable assets like fiat currencies or commodities. They are designed to maintain a consistent value, usually $1 USD, but can depeg during periods of extreme market volatility if investor confidence in the backing assets falters.

The drastic depeg of USDR by nearly -50% is an unusual event in the crypto sector, reminiscent of the LUNA-UST collapse. On-chain analyst Dune reported that USDR's depeg was likely triggered by a wave of massive withdrawals.

On-chain data showing massive withdrawals from USDR

Underlying Issues

The primary collateral backing USDR comprises less liquid assets like real estate and the stablecoin DAI. By October 10, 2023, $11.8 million worth of DAI collateral had been completely drained, leaving only the less liquid assets.

The TangibleDAO website indicates that USDR's collateralization has fallen below the required threshold when excluding the native TNGBL token. Alarmingly, some USDR stablecoins are collateralized by other USDR tokens, a critical weakness in the asset's structure.

USDR collateral breakdown as of the evening of 11/10/2023

Ripple Effects on Related Assets

Other tokens linked to TangibleDAO, such as TNGBL and CVR, have also experienced significant price drops following the depeg of USDR.

24-hour TNGBL price fluctuation captured at 12:05 AM on 12/10/2023

24-hour CVR price fluctuation captured at 12:05 AM on 12/10/2023

Historical Context

The instability of "stable" stablecoins is not unprecedented. The recent prolonged depeg of USDT during August and September 2023 and USDC's depeg following the collapse of Silicon Valley Bank earlier this year are notable examples.

As the crypto community continues to navigate these challenges, the stability of assets like USDR remains a critical area of focus.