After the fall of the UST cryptocurrency, it is the turn of the stable DEI to inspect its indexing

The impressive fall into terrestrial treasuries is beginning to have consequences for the entire algorithmic stablecoin sector. The first victim is DEI.

After the floor cabinets, it’s DEI’s turn to fall in value. The algorithmic stablecoin of the DEUS ecosystem, which was pegged to the dollar, lost its peg on the night of May 15, dropping in a few hours from the value of $1 to $0.52. The cryptocurrency has since struggled to rally, and is back at $0.67 at the time of this article. But there is no guarantee that it will ever be able to recover definitively – because, as Numirama showed a few days ago, the fall of terrestrial vaults could mark the end of encryption algorithms.

Stable coins are a separate category within cryptocurrencies. It is supposed, by definition, to have a fixed price, and to use various mechanisms to do so. The most popular stablecoin, Tether, uses dollars or shares to insure its price – but in the case of algorithmic stablecoins, such as UST and DEI, there are a number of calculations involved. But in some cases, these devices just aren’t enough: Terra’s UST Project is proof of this, and DEI could be next.

The price of DEI, which has been stable until then, has stopped / Source: Coin Market Cap

The fall of DEI, first of a long list?

DEI is the computational stablecoin of the DEFI (Decentralized Finance) ecosystem, a cross-blockchain project that provides financial services. DEI works in tandem with DEUS, the system’s other cryptocurrency, thanks to the . mechanism Burn And Mint That the two originals can balance each other out – and DEI, to keep them indexed. This is a bit of a hardware device from UST and LUNA, although the stablecoin has also relied on the correlation between cryptocurrency to maintain its value.

The reason for DEI’s discontinuation is partly due to several attacks that the ecosystem has suffered in recent months, which caused DEUS to lose 43% of its value, according to Decrypt media specialist. With this downturn, the mechanism for keeping DEI afloat has become more complex, and has failed to keep pace – and some users have taken advantage of the double crypto balancing system to sell DEUS at the DEI price. As a result, the price of the stablecoin has stalled.

DEUS
Can the DEUS ecosystem survive the decline in the value of its stablecoin? // Source: Deus

The decline in DEI is not entirely due to the floor tanks – but the timing is not insignificant. Did the sinking of the Terra stablecoin give ideas to others, who tried to make money on the back of DEI? At the moment, it is difficult to determine. What is certain is that it will be difficult to restore investor confidence in a project similar to UST – and this booth does not bode well for the future of DEI.

Can IEDs be saved?

Our team works tirelessly to get DEI indexed back DEUS warned on Twitter on May 16, hours after the leak. ” Mitigation measures are taken immediately and solutions are being developed to ensure long-term stability. ”

For now, the DEUS ecosystem teams are avoiding making the same mistakes that Terra did: they have suspended the balancing mechanism between these two cryptocurrencies for the time being, and are trying to create a new DEI escrow system. It remains to be seen if this will be enough to allow him to regain his indexing.

For now, the DEUS ecosystem teams are avoiding making the same mistakes that Terra did: they have suspended the balancing mechanism between these two cryptocurrencies for the time being, and are trying to create a new DEI escrow system. It remains to be seen if this will be enough to allow him to regain his indexing.

For now, in general, it appears that the “classic” stablecoin segment is holding up. During the collapse of the treasuries, all heads turned to Tether, the most popular stablecoin, which stopped briefly at $0.95. In the end, he held out and was able to get back to his index – but the entire sector is still very hectic. If DEI can’t wake up soon, it may be too late for him.

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