Trader Loses $107,000 To MEV Bot Panic Selling Obscure Stablecoin
October 12 2023 - 10:00PM
NEWSBTC
Lookonchain, a blockchain tracking platform,
now reveals that one stablecoin holder lost over $100,000
after panic selling USDR, a stablecoin issued on the Polygon
network, for zero USDC after it depegged on October 11. The
stablecoin holder swapped 131,350 USDR for zero USDC, allowing an
MEV bot to swoop in and claim $107,000 in profit. The USDR
Depegging, Stablecoin Falls To $0.50 The stablecoin is issued by
Tangible protocol, a decentralized finance (DeFi) protocol that
claims to be tokenizing housing and other real-world assets. Due to
the immutable nature of the Polygon network, the USDR holder is now
at a loss. All on-chain transactions cannot be reversed
unless there is a network rollback, which will unwind other
transactions as a result should validators choose to do so.
However, considering how public ledgers operate, it is improbable
that a rollback will be done to recover funds. Related
Reading: Buy LINK Now? Chainlink Touted As ‘Safest Bet’ For This
Mega Trend There has yet to be any feedback from the MEV bot
operator on whether they can refund the affected user. Since the
error was on the swapper’s side and not the hack, the community’s
response to this mistake remains largely muted. Real USD, USDR, is
a stablecoin backed by a blend of other crypto assets and real
estate. Considering the stablecoin’s construction, USDT is
interest-bearing, meaning holders receive rewards. It was meant to
track the USD but lost its peg on October 11 after a wave of
redemptions drained the project’s treasury of its liquid assets,
including DAI. By the close of October 11, USDR
was trading versus the USD at around $0.53, a near 50% drop,
triggering panic. Moments after the rapid withdrawal of DAI and
liquid assets from its treasury, the team explained that USDR fell
to as low as $0.50 before recovering. Tangible Finance
Working On A Recovery Plan Despite the depegging, the USDR issuer
said it is working on making holders whole, saying the crisis is
mainly “liquidity related.” It also attempted to assuage holders,
assuring that “the real estate and digital assets backing USDR
still exist and will be used to support redemptions.” Related
Reading: Bitcoin Doom Signal Warns Of 50% Crypto Collapse Updating
the community on X, the issuer said it is not “going
anywhere” and is working on a “plan”: Tangible isn’t going
anywhere. We have a flywheel that works and plans to continue
building within that. A critical part of our shared future success
is maintaining the trust we’ve established with our users over the
past year, which we hope to maintain through the plan below. Beyond
the panic selling and one holder losing over $100,000 to an MEV
bot, the extent of the USDR depeg has not been fully quantified. As
of October 12, Polyscan data shows over 2,400 USDR holders. In
total, they cumulatively control slightly over 45.5 million of the
stablecoin. Feature image from Canva, chart from TradingView
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