On the evening of May 15, the algorithmic stablecoin DEI of the Deus Finance DAO project lost its peg to the US dollar.
#PeckShieldAlert stablecoin $DEI tanks to $0.77. https://t.co/mzfVnN06Wi pic.twitter.com/BaqmDF16KM
— PeckShieldAlert (@PeckShieldAlert) May 16, 2022
The price of the “stablecoin” reached $0.51. At the time of writing, the asset is trading at levels around $0.68, with a market capitalization of $62 million (CoinGecko).
Over the past 24 hours, the DEUS token, used to mint the stablecoin, has fallen in price by approximately 34% to around $190.
The drop in the DEI price below $1 coincided with the publication of a proposal to launch a fixed-rate debt token program from DEUS Treasury:
“The stablecoin market has been rocked by the fall of the UST. We believe a strong $1 peg and full provisioning is the answer to addressing short-term stability.”
The aim of the initiative is the implementation of DEI support by a basket of assets at a ratio of 1:1. According to the site, the algorithmic stablecoin is “partially backed.”
“History keeps repeating itself. Now another stablecoin has lost its peg, as has UST. Maybe we will finally stop creating models like this that just don’t work?” one user wrote.
History is still repeating itself. Now another stablecoin $DEI has depegged. Just like #UST. Can we please stop building models like this that simply do not work? https://t.co/DqMdzkciIO
— Cryptik (@Cryptik19) May 16, 2022
So he responded to a tweet in which an investor under the nickname BigBenStats expressed hope for an early recovery in the DEI price and mentioned the support of the coin by 80% reserves.
Earlier, amid the UST incident, Ethereum co-founder Vitalik Buterin said that the term “algostablecoin” has become propaganda, serving to “legitimize fiat stablecoins.”
Agree hard on this, with the one quibble that “algostable” has become a propaganda term serving to legitimize uncollateralized stables by putting them in the same bucket as collateralized stables like DAI/RAI, and we need to really emphasize that the two are very different .
— vitalik.eth (@VitalikButerin) May 14, 2022
He urged not to compare such assets with fully backed “stablecoins” such as DAI.
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Source: Cryptocurrency
