Following the collapse of TerraUSD, DEUS Finance’s algorithmic stablecoin, DEI, fell below $0.60. Attention should be paid to the 5 altcoin projects as they have a stablecoin mechanism similar to UST.
Deus Finance’s dollar-pegged stablecoin drops below 60 cents
As market continues to mourn losses over Terra (LUNA) UST and LUNA debacle, Phantom (FTM)-based DeFi protocol DEUS DEI (DEUS), a stablecoin used as a collateral mechanism for third-party instruments built on Finance, failed to hold the dollar steady, falling below 0.60 cents on Monday.
DEI’s price hit an all-time low of $0.52, while its market cap also fell from nearly $100 million to about $52 million. followed. However, despite the stablecoin’s unbundling, DEUS Finance’s management token, DEUS, rose from $163.40 to $327.28 before falling to $255.36. At the time of writing, DEI has a price of $0.66 and a market cap of $59 million.
Altcoin collapse comes after UST and LUNA debacle and decision to pause DEI payments
DEI surge comes after stablecoin fears caused by UST and LUNA debacle and Deus Finance developers’ decision to pause DEI payments. But according to the official Telegram channel, the DEI fixation system will be restored in the next 24 hours.
Although DEI is also an algorithmic stablecoin like UST, the DEI stablecoin is collateralized, meaning users can issue 1 DEI by depositing $1 worth of collateral. These can be cryptocurrencies such as USD Coin (USDC), Fantom (FTM), Dai (DAI), WBTC or DEUS.
How does DEI work?
Similar to the UST, the price stability of the DEI is stabilized by a mechanism that involves printing and burning the DEUS. When issuing DEI, a DEUS collateral is burned unless other tokens are used as collateral. On the other hand, DEUS is printed when using DEI.
As we reported as Kriptokoin.com, in March, the DeFi project was the victim of an attack that resulted in the loss of $3 million worth of DAI and Ethereum (ETH). Therefore, the platform has decided to close the DEI loan agreement. A day after the Deus Finance hack, DeFi protocols Agave and Hundred Finance also reported attacks that resulted in various crypto losses worth a total of $11 million.
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