blockworks.co
TrueUSD is quickly climbing the stablecoin dominance charts, thanks to Binance.
In top stablecoins by market capitalization, $TUSD is now ranked number 29. The token’s market capitalization increased from around $755 million at the end of 2022 to $2.4 billion on Monday.
Stablecoin $TUSD, which was relatively unknown until recently when Binance made $BTC-$TUSD a zero-fee trading pair, lost its dollar peg Monday, hitting a high of $1.20 relative to $USDT on Binance.
Binance’s $BTC-$TUSD pair is now one of the highest-volume trades in the entire industry, researchers from Kaiko said.
“$TUSD liquidity has not kept pace with its volumes, making a depegging like this more likely,” Kaiko analysts added.
Monday’s $TUSD depeg coincided with a number of users on Aave and Compound borrowing large amounts of the token, apparently with organic transactions, Kaiko said.
“The most common strategy was borrowing $TUSD and swapping for USDC, effectively shorting $TUSD from its elevated price,” analysts added. “However, neither Aave nor Compound have a large supply of $TUSD, which meant that borrowing rates quickly surged, hitting over 100% APR on both protocols.”
The move also coincided with Tron founder Justin Sun depositing over $50 million worth of $TUSD on Binance, spurring speculation that Sun was trying to farm the $SUI liquidity pools on Binance, which requires users to stake $TUSD or BNB. Binance CEO Changpeng “CZ” Zhao threatened Sun with legal action, and Sun then admitted someone on his team was using a portion of the funds to farm, but most were to be used for market making $TUSD on the exchange.
“Looking at market depth for the $TUSD-$USDT pair on Binance, someone has been adding liquidity in massive size: the pair is now the most liquid pair on Binance after a huge $200mn injection of orderbook liquidity at the 1% level,” Kaiko added.
With increased depth and surging demand – thanks, $SUI launchpad – $TUSD is securing its spot as a top player in the stablecoin landscape.