TrueUSD Borrowing Rates Jump to 100% as TUSD Soars to $1.20

The relatively unknown stablecoin TUSD lost its dollar peg on Monday, hitting a high of $1.20 against USDT. In the top stablecoins by market capitalization, TUSD is currently ranked 29th. The market capitalization of the token has increased from approximately $755 mln at the end of 2022 to $2.4 bln on Monday.

When Binance made BTC-TUSD a zero-fee trading pair, the stablecoin lost its peg to the dollar on Monday, hitting a high of $1.20 against USDT on Binance. According to researchers at Kaiko, the Binance BTC-TUSD pair is currently one of the biggest trades in the entire industry.

Kaiko reported that on-chain traders used Aave and Compound, two popular lending protocols, to borrow large amounts of TUSD and quickly exchange those assets for USD Coin (USDC), another dollar-pegged token. Such a move was to effectively short or bet against TUSD due to its higher price. However, neither Aave nor Compound had a large supply of TUSD, causing borrowing rates to exceed 100% APR on both protocols.

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