In a shocking turn of events on the evening of October 11, the USDR stablecoin experienced a catastrophic peg loss, leading to a series of unfortunate transactions that left one trader in utter despair. The incident, which unfolded on the decentralized exchange (DEX) OceanSwap, highlights the risks associated with decentralized finance (DeFi) and the consequences of unstable market conditions.
On the fateful evening, an unfortunate trader decided to swap a significant sum of 131,350 USDR through OceanSwap. However, what they received in return was a staggering sum of precisely zero USDC. This incident left the trader in disbelief and shock, as they watched their assets vanish into thin air. Panic swept through the DeFi community as word of this transaction spread like wildfire.
Someone swapped 130,000 $USDR for 0.0001 $USDC
REKT pic.twitter.com/YPjcUC4vzS
— Rekt Fencer (@rektfencer) October 11, 2023
Just a day later, on October 12, another trader attempted to swap 131,350 wUSDR through the same platform, OceanSwap. This trader, seemingly gripped by panic, mistakenly confirmed the swap with a shocking exchange rate of 1 USDR for less than 0.0001 USDC. This desperate move was an attempt to convert their assets to a more stable cryptocurrency, given the dramatic 50% loss in USDR’s peg.
Unfortunately, the outcome was no different from the previous incident, and this trader found themselves holding a sum of USDC that was nearly equivalent to zero. The incident raised concerns about the stability and reliability of the USDR stablecoin during times of market turmoil.
Adding to the chaos, a Miner Extractable Value (MEV) bot executed a transaction and profited a staggering $107,000 from the turbulent market conditions. This bot successfully arbitrated the volatile market, highlighting the inherent risks and opportunities present in the DeFi space.
Due to the decoupling of the stablecoin USDR, this guy accidentally swapped 131,350 $USDR for 0 $USDC while panic selling $USDR.
And a MEV bot successfully arbitraged $107K.https://t.co/FHOJtaGcSDhttps://t.co/IYtoqar29N pic.twitter.com/USLF1qkVDK
— Lookonchain (@lookonchain) October 12, 2023
The exact cause of the substantial discrepancy in the exchange rate has yet to be clarified. However, some experts speculate that it may be linked to an imbalance in the token reserves within the trading pool. USDR, a stablecoin supported by Real World Assets and various cryptocurrencies, was valued at $1 but plummeted to just $0.5 on the evening of October 11. This sudden loss in peg value was attributed to a massive wave of withdrawals and liquidations as investors rushed to exit the market.
Read more:
- Why USDR’s Real Estate-Backed Stablecoin Plummeted To $0.50
- Stablecoin Market Capitalization Hits A 18-Month Low