Trader exchanged 131k stablecoins at $0 during USDR depeg.
During yesterday's real estate US dollar stable coin real dollar (USDR) crisis, a trader exchanged 131,350 USDR for 0 USD coin (USDC), resulting in a complete loss on his investment.
According to a report by blockchain analytics firm Lookonchain on October 12, the swap took place through BNB Chain's decentralized exchange OpenOcean, during which the USDR dropped to 50% of its par due to liquidity problems. The Maximum Extractable Value (MEV) bot then picked up the difference, making a total of $107,002 in profit through arbitrage trading.
In cases of poor liquidity, slippage on DEXs can be as high as 100%. In September 2022, Cointelegraph reported that a trader tried to sell $1.8 million of Compound USD (cUSDC) via Uniswap DEX V2 and received $500 worth of assets in return. An MEV, in this instance, executed an arbitrage trade before being robbed of over $1 million in profit a few hours later.
On October 11, USDR users were compromised after demanding more than 10 million stablecoins for ransom. Although he was 100% backed, less than 15% of his $45 million assets at the time were backed by liquid project tokens TNGBL, with the rest backed by illiquid real estate assets.
According to analyst Tom Wan, the tokenized assets are held on the ERC-721 standard, which cannot be distributed to create liquidity for investor redemptions. Additionally, the homes below may not be sold immediately to meet investor withdrawal requests. Overall, the Real USD Treasury failed to meet redemptions, causing investor confidence to collapse.
Although it is fully supported, why did the USDR change: – Using an illiquid asset supporting a liquid asset
– USDR 100% supported. 50% of them come from statcoins and the rest from real estate.
– When there is a bankable (massive redemption USDR), the amount of Stablecoin money in… pic.twitter.com/OYhQ0twUUd
— Tom Wan (@tomwanhh) October 12, 2023
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