BitUSD hasn't had its $1 peg for more than two months

advertisement

BitUSD, the earliest mainstream stablecoin launched in July 2014, lost its peg with the US dollar in November 2018 and hasn't recovered since. BitUSD was designed as the native currency of a platform launched by Daniel Larimer and Charles Hoskinson BitShares. It is collateralized by BitShares tokens.

As BitMEX Research pointed out, BitUSD had a flawed price stability mechanism since it only protects against the scenario where the value of BitShares falls and not when the value of BitUSD falls. The mechanism to hold the $1 peg was psychological.

On Nov. 25 2018, BitUSD triggered an emergency procedure called 'global settlement' because bitUSD was too under-collateralized by BitShares. The event caused a disablement of BitUSD borrowing and the price of BitUSD subsequently collapsed. The circulating supply has also been nearly cut in half in the last four months.

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Digital asset economy fuels instant settlements innovation

Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC
More