USDT was trading below (and above) its $1 peg on various exchanges – a result of specific market dynamics. This created arbitrage opportunities where users could buy it cheaper on one platform and sell it for profit on another.
However, it is very important to note that Tether’s CTO confirmed on multiple occasions that the company backing USDT – Tether – continued redeeming the stablecoin at its value ($1), meaning that the peg remained unfazed.
More Stablecoins Depeg After Terra’s UST
CryptoQuant CEO also asked the Tether CTO when the company would provide an audit for USDT, which echoes earlier statements from members of the crypto community. However, Ardoino said the firm is working on an audit, adding, “hopefully, regulators will push more auditing firms to be more crypto friendly.”
Following the UST price plunge, other stablecoins also lost their peg. Two of such stablecoins, Fantom USD (fUSD) and Dei (DEI), deppeged, which caused a massive loss for DeFi protocol Scream.
The project failed to adjust the prices of fUSD and DEI. This mistake caused it to incur a bad debt of $35 million. In a tweet thread, Scream said it was working on a solution, adding that the Fantom Foundation was planning to run a liquidation bot to tackle the issue.
Scream also mentioned that the platform will hardcode fUSD to $0.81. However, that could pose more problems, as the price of fUSD has further dipped to $0.74 at the time of writing.
