Huobi explained what went wrong with HUSD i.e. the company revealed what caused the short-term liquidity difficulty and assured consumers that it had been fixed when the HUSD stablecoin’s dollar peg was restored.
On Thursday, HUSD began to decrease in value relative to the dollar, beginning the day at $0.92 and falling as low as $0.82 a few hours later. This frightened community members, who speculated about what would happen if the stablecoin’s dollar peg was not restored.
HUSD was once one of the safest stablecoins. Now it's off its peg. If HUSD doesn't return to $1, it'd be the first fully-reserved centralized stablecoin to fail. pic.twitter.com/9WmROQR6lD
— John Paul Koning (@jp_koning) August 18, 2022
Huobi Explained What Went Wrong With HUSD
In response to the worries, the crypto exchange platform said immediately that they had contacted the stablecoin issuer, Stable Universal Limited, and was trying to restore the stability. Before the end of the day, the Ethereum-based stablecoin had nearly recovered its dollar peg, trading at $0.99 per HUSD before returning to $1 on Friday.
The depeg was sparked by a move to terminate market maker accounts in specific countries to conform with laws, according to the HUSD team. The team said that the time difference in banking hours had created a gap, resulting in a liquidity crisis, which caused the HUSD to deviate from its peg.
Huobi subsequently informed its clients in an announcement that the problem had been resolved entirely, and asked its users to pay close attention and be mindful of any potential hazards owing to the market’s volatility.
Acala Dollar News
Meanwhile, a 1 billion Acala Dollar (aUSD) attack led the stablecoin to depeg by 99%. In reaction to the attack, the Acala team locked the hacker’s wallet, casting doubt on the platform’s promises of decentralization. The team was finally able to retrieve a considerable chunk of the uncollateralized tokens.
The USDD stablecoin also lost its dollar peg in June, when one of the funds that had capitalized on the TerraUSD (UST) depeg began aggressively transferring large quantities of USDD. The depeg, however, was short-lived, as the Tron DAO Reserve rallied 700 million USD Coin (USDC) to protect the peg.
In Other Huobi News
Recently, Houbi stopped the country of New Zealand from trading derivatives. It made the decision after the variety of digital items that exchanges sell has skyrocketed. Huobi announced that the ban will be in effect as of next week. This has perplexed users in New Zealand, especially because it comes very soon after the company received official authorization to do business in the nation.
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