Like Terra’s UST, this algorithmic stablecoin lost peg and crashed to $0.54


Share:
  • Deus Finance’s DEI, an algorithmic stablecoin, lost its peg and nosedived to $0.54 recently. 
  • The stablecoin is backed by nearly 20% of DEUS tokens and other stablecoins like USDC, unlike TerraUSD. 
  • Deus Finance announced that the team is working around the clock to re-peg DEI. 

After Terraform Lab’s TerraUSD (UST) nosedived and suffered a de-peg, the number of stablecoins losing their $1 peg has increased. Deus Finance’s DEI recently plummeted from its peg and hit $0.54. 

DEI collapsed after losing its peg, hits $0.54 

A stablecoin on the Fantom network, DEI, by Dues Finance, became the latest stablecoin to lose its peg. DEI nosedived to a $0.54 low after losing its $1 peg. Unlike TerraUSD (UST), DEI is backed by 20% of DEUS tokens and by other stablecoins. 

DEI price chart

DEI price chart

DEI is considered a low-risk stablecoin, compared to alternatives like Tether USD (USDT) and USD Coin (USDC) since it is a fractional reserve stablecoin. DEI does not require over-collateralization; however, the majority of its collateral is stablecoins like USDC. 

The composition is free-flowing, and currently, nearly 20% of DEI’s reserves are DEUS tokens. The collateral ratio of the stablecoin DEI is dynamic and determined via arbitrage bots. 

DEI followed the trend of stablecoins losing their peg, like Terra’s UST and Tether’s USDT. 

Proponents have identified two critical reasons for DEI losing its peg and plummeting to a low of $0.54 level. In March 2022, nearly $13 million worth of DAI and ETH was stolen from Deus Finance. This was a key reason for the platform closing its DEI lending contract. Deus Finance’s developers paused DEI redemptions, further fueling a bearish sentiment among investors. 

The Deus Finance team has allayed holders’ fears by announcing that they are working around the clock to restore the DEI peg. The team has implemented mitigation measures for long-term stability and reestablishing DEI’s peg at $1. 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Ripple holders' profit taking hits a 19-month high as XRP price shoots up by 42%

Ripple holders' profit taking hits a 19-month high as XRP price shoots up by 42%

XRP price has performed beyond expectations and has marked a multi-month high, restoring confidence in its investors. These holders have also made the most of the situation and turned to sell, which could backfire on the price action soon.

More Ripple news

Decentraland Price Forecast: What to expect from MANA as Metaverse Fashion Week kicks off

Decentraland Price Forecast: What to expect from MANA as Metaverse Fashion Week kicks off

Decentraland price (MANA) has identified critical support on day one of the Metaverse Fashion Week. The token is trading horizontally on the four-hour timeframe as bulls push to break above a descending trendline.

More Decentraland News

Ethereum devs confirm withdrawals to begin on April 12; Here's what to expect from ETH price

Ethereum devs confirm withdrawals to begin on April 12; Here's what to expect from ETH price

Ethereum is on the verge of bringing about one of the biggest upgrades to the blockchain since the Merge. The arrival of withdrawals has been anticipated for a long time now, however, it may not be as lucrative for Ethereum price as one might expect.

More Ethereum News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Market woes threaten bullish potential, XRP is undeterred

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Market woes threaten bullish potential, XRP is undeterred

Bitcoin has reclaimed above $27,000, but increasing market volatility threatens the leg up. Ethereum faces critical resistance at $1,819 as investor sentiment suggests liquidity issues. Ripple reaches multi-month highs amid lawsuit-related optimism.

More Bitcoin News

Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state. 

Read full analysis

BTC

ETH

XRP