Could this token be the next PEPE as TUSD liquidity injection depegs stablecoin?
- SUI farming led to heavy borrowing of the TUSD pair, resulting in the stablecoin being depegged.
- Recently, CZ threatened Tron founder Justin Sun against farming SUI on the Binance launch pool.
- Sui mainnet is scheduled to launch on May 3, but no information regarding SUI’s listing has come forward yet.
At the moment, the market is kinder to the cryptocurrencies that are witnessing some or other kind of hype and trend. PEPE reinforced the notion that the only qualifying factor for a hit crypto at the moment is demand, as fundamentals do not seem to matter.
SUI farming ignites TUSD use
Sui is an upcoming layer-1 blockchain that is being developed to support the growth of DeFi and GameFi markets by offering instant finality for transactions. Noted to be the native token of this blockchain, SUI is currently undergoing farming, which is kind of similar to an Initial Coin Offering (ICO).
Sui has stated its goal as "to cater to the next billion users in web3" and is attempting to tick all the right boxes to achieve this goal. For the same reason, the blockchain made use of the same programming language, Rust that Solana uses, which currently is one of the fastest blockchains in the market.
At the moment, TUSD is being used to farm SUI, and as a result, TUSD has become one of the most in-demand tokens right now. Its pair with USDT also became the most liquid pair on Binance, with a $200 million injection of order book liquidity at the 1% level.
Consequently, TUSD began to depeg, hitting the high of $1.2 against USDT's $1 peg. Furthermore, thanks to Binance's promotion of the stablecoin by making BTC/TUSD a zero-fee pair, TUSD has become one of the most highly traded tokens despite being relatively unknown.
TUSD/USDT price
But in addition to just retail demand, the stablecoin also caught investors' eyes after the recent Changpeng Zhao (CZ)-Justin Sun issue. The Tron founder was warned by the Binance CEO not to farm any SUI with his TUSD deposits.
The comments came after it was discovered that Sun had transferred over 56 million TUSD from his wallet to Binance, where the SUI launch pool is being hosted by staking BNB or TUSD. In response, CZ stated,
"Our team told Justin, if he uses any of these to grab the LaunchPool Sui token, we will "take action against it". SMH.Binance LaunchPool are meant as air drops for our retail users, not just for a few whales. On the bright side, blockchains are transparent…
Sun justified this, claiming that he was simply acting as a market maker for TUSD and adding more supply to improve liquidity and settle pending orders.
经查，作为TUSD的合作做市商TRON DAO Venture过去数小时已经累计完成4000万美元的交易量，对于保持TUSD的价格稳定起到了作用，确实因部分同事不了解该资金用途，使用部分资金参与了交易所活动，我们已第一时间联络交易所，对于交易所活动资金进行全额退款，对此错误我们深表歉意！望周知！
— H.E. Justin Sun 孙宇晨 (@justinsuntron) May 1, 2023
The launch of the Sui mainnet is scheduled for May 3rd, however, as of yet, there has been no information disclosed about its corresponding token. The token would have gone unnoticed had CZ and Sun not exchanged words over it, as SUI is now fielding a lot of interest over social channels.
A situation similar to the viral "PEPE" meme phenomenon is highly unlikely to occur in the crypto market. This is primarily because the meme lacks the widespread appeal and enthusiastic following that dog and frog memes have garnered.
Furthermore, the recent cryptocurrency market downturn served as a reminder of the inherent volatility and unpredictability of the industry. Therefore, the occurrence of another extreme market event could potentially reinforce the reputation of the crypto market as a fleeting, immature fad bubble.
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
