Embattled TrueUSD (TUSD) stablecoin attributed the asset’s recent price deviations from the $1 peg to the “community mining activities associated with Binance Launchpool,” which resulted in “short-term arbitrage opportunities.”

TUSD’s value has recovered to $0.9904 as of press time after falling to as low as $0.9708 during the past day, according to CyptoRanking’s data.

Addressing price fluctuations

In a Jan. 18 statement on social media platform X, the project’s team characterized the recent volatility as a “normal aspect of market dynamics and liquidity adjustments.” They emphasized that the stablecoin redemption channels remain operational and accessible at a designated website.

“TUSD minting and redemption services are always accessible at tusd.io,” TUSD added.

The project clarified that routine attestations are underway as part of standard operations, debunking any claims suggesting otherwise.

In addition, the team expressed its dedication to expanding its collaboration with Binance and dispelled any concerns about the stablecoin stability.

Why TUSD’s value depegged

On Jan. 16, CyptoRanking reported TUSD’s departure from its $1 peg as holders shifted their assets to competitors like Tether’s USDT.

Observers speculated that the deviation could be tied to Binance’s exclusion of the Justin Sun-linked stablecoin from its launchpool. The launchpool incentivizes investors to lock up certain assets, like FDUSD or BNB, for a predetermined period.

Previously, TUSD was one of the assets allowed for participation in launchpool activities. However, its removal from the list triggered significant selling activity in the market.

On-chain analyst Lookonchain suggested that a whale dumped 2.5 million TUSD on Binance for other stablecoins. However, the investigator also identified two whales, including an address suspected to belong to Justin Sun, buying TUSD in an effort to return it to its peg.

Last year, TUSD saw a dramatic uptick in its circulating supply, which climbed to a peak of $3.5 billion in September from $840 million at the start of the year thanks to the heavy patronage it enjoyed from Binance.

However, the stablecoin supply has dipped by more than 40% in the last two months to under $2 billion after Binance began to promote a new stablecoin, FDUSD.

Oluwapelumi Adejumo

Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.

Liam 'Akiba' Wright

Also known as "Akiba," Liam is a reporter, editor and podcast producer at CyptoRanking. He believes that decentralized technology has the potential to make widespread positive change.