After recovering the dollar peg of the HUSD stablecoin, crypto exchange Huobi explained what caused the short-term liquidity problem and assured users that it has been resolved.
On August 18th, HUSD started declining from its dollar value, trading at $0.92 at the start of the day and falling to $0.82 a few hours later. This has worried community members, speculating about what could happen if the stablecoin does not recover its dollar peg.
HUSD was once one of the safest stablecoins. Now it is off its peg. If HUSD doesn’t bounce back to $1, it will be the first fully-reserved centralized stablecoin to fail. pic.twitter.com/9WmROQR6lD
— John Paul Koning (@jp_koning) 18 August 2022
In response to concerns, crypto exchange platforms immediately announced That they are in contact with the stablecoin issuer, Stable Universal Limited, and working to restore stability. Before the day ended, the Ethereum-based stablecoin traded its dollar peg at around $0.99 per HUSD, before moving back to $1 on August 19.
According to the HUSD team, the depeg was Reason By the decision to close market maker accounts in order to comply with regulations in certain areas. The team explained that the time difference in banking hours created a gap that caused liquidity problems, causing HUSD to fall off its peg.
Huobi then gave its customers a . assured through Announcement That this issue was fully taken care of and urged its users to pay attention and be aware of any potential risks due to market volatility.
related: Tether Reserve Verification to be Conducted by Leading European Accounting Firm
Meanwhile, the stablecoin fell by as much as 99% due to the exploitation of the 1 billion single dollar (aUSD). In response to the attack, the Acala team froze the hacker’s wallet, raising questions about the platform’s claims of decentralization. The team was eventually able to recover a large portion of the tokens that were not collateralized.
In June, the USDD stablecoin also fell off its dollar peg as one of the capitalized funds on TeraUSD (UST) Dipag began actively moving USDD in large amounts. However, Depp did not last long as the Tron DAO Reserve raised USD 700 million in coin (USDC) to protect the peg.
