The dollar-pegged stablecoin DEI issued by Deus Finance falls below 60 cents
As a result of TerraUSD’s devaluation, DEI, DEUS Finance’s algorithmic stablecoin, plunges below $0.60.
Stablecoin DEI, which was used as collateral for third-party tools built on the Fantom (FTM)-based decentralised finance protocol DEUS Finance (DEUS), has struggled to uphold its dollar peg, falling below $0.60 cents on Monday as the market continues to lament losses on the Terra (LUNA) UST and LUNA debacle.
The market capitalization of DEI fell from around $100 million to roughly $52 million as its price fell to an all-time low of $0.52. Amidst this, DEUS Finance’s Governance Token (DEUS) surged up from $163.40 to $327.28, before sliding back down again to $255.36.
DEI has a market valuation of $59 million and a price of $0.66 at the time of this writing. The UST and LUNA fiascos have raised concerns about the stability of stablecoins, and the makers of Deus Finance have decided to halt DEI redemptions. It’s not clear when the DEI peg will be reinstated, according to its official Telegram channel.
The algorithmic stablecoin, DEI, is similar to UST in that it is backed by a deposit of $1 in collateral, but unlike UST, the DEI stablecoin is collateralized. USDC, Fantom (FTM), Dai (DAI), WBTC, or DEUS are examples of these assets.
DEI’s peg is held in place by the minting and burning of DEUS, same as UST’s. Minting DEI requires the employment of a DEUS collateral which is then destroyed. As an alternative, when you redeem DEI, a new coin is created, called DEUS.
In March, the DeFi project was the victim of a cyberattack that cost the project $3 million in DAI and Ether (ETH). Consequently, it was decided to terminate the DEI loan contract on the platform An further $11 million worth of crypto coins was lost the day following the Deus Financing attack, using the DeFi protocols Agave and Hundred Finance.