Decentralized stablecoin USDB, backed by DAI, has temporarily lost its peg to the U.S. dollar, dropping 6% in value. This drop occurred amid market panic triggered by chaos in Japan.
USDB, a decentralized stablecoin, has come under heavy pressure as its price dropped by as much as 6% due to market fears. Cybersecurity analysts at web3 firm Resonance Security have raised concerns over USDB’s dependence on external protocols for yield generation. They noted that MakerDAO “has not published a security audit of their smart contracts in three years.”
Japan’s stock market faces worst day since 1987
The USDB depegging occurred as both crypto and traditional markets faced chaos. Japan’s stock market experienced its worst day since 1987. The Tokyo Stock Exchange’s Nikkei index plummeted by 12%, marking a 20% decline from its all-time high in July. This prompted a brief trading halt.
Following Japan’s downturn, South Korea’s benchmark KOSPI fell by 8%, recording its worst session since March 2020. Amid panic, South Korean authorities tried to calm investor fears, with the finance minister pledging a contingency plan to address market volatility.
The entire crypto market also faced a downturn amid the sell-off. Bitcoin (BTC) briefly fell below the $50,000 mark, while Ethereum (ETH) dropped to $2,264. According to data from Coinglass, the total volume of crypto liquidations in the past 24 hours has exceeded $1 billion.
