Lookonchain, now a blockchain tracking platform reveals that a stablecoin holder lost more than $100,000 after panic selling USDR, a stablecoin issued on the Polygon network, for zero USDC after it was delinked on October 11. The stablecoin holder traded 131,350 USDR for zero USDC, allowing a MEV bot to swoop in and claim $107,000 in profits.
Due to the depegging of the USDR, Stablecoin falls to $0.50
The stablecoin is issued by the Tangible protocol, a decentralized finance (DeFi) protocol that claims to tokenize housing and other real-world assets. Due to the immutable nature of the Polygon network, the USDR holder is now at a loss.
All on-chain transactions cannot be reversed unless there is a network rollback, which will undo other transactions if validators choose to do so. However, given the way public ledgers work, it is unlikely that there will be a rollback to recover funds.
There is no feedback yet from the MEV bot operator on whether they can refund the affected user. Because the error was on the part of the swapper and not the hack, the community’s response to this error remains largely muted.
Real USD, USDR, is a stablecoin backed by a mix of other crypto assets and real estate. Given the stablecoin’s construction, USDT is interest-bearing, meaning holders receive rewards. It was intended to track the USD but lost its peg on October 11 after a wave of redemptions drained the project’s liquid assets, including DAI.
By the end of October 11, USDR was trade against the USD around $0.53, a drop of almost 50%, causing panic. Shortly after the rapid withdrawal of DAI and Treasury liquidity, the team explained that the USDR fell to a low of $0.50 before recovering.
Material finance is working on a recovery plan
Despite the depegging, the USDR issuer said it is working to restore holders to health, saying the crisis is mainly “liquidity-related.” It also sought to reassure holders by assuring that “the real estate and digital assets backing the USDR still exist and will be used to support redemptions.”
Updating the community about X, the publisher said it is not “going somewhere” and working on a “plan”:
Tangible isn’t going anywhere. We have a flywheel that works and plan to continue building within it. A critical part of our shared future success is maintaining the trust we’ve built with our users over the past year, and that we hope to maintain through the plan below.
Aside from the panic selling and one holder losing over $100,000 to a MEV bot, the size of the USDR depeg has not yet been fully quantified. As of October 12, data from Polyscan shows more than 2,400 USDR holders. In total, they cumulatively control just over 45.5 million of the stablecoin.
Feature image from Canva, chart from TradingView