Stablecoins are a sort of cryptocurrency that, since they are backed by assets, provide more excellent stability than other cryptos. Because of the apparent benefits these currencies offer, there are presently a number of stablecoins in circulation. First and foremost, they are steady, which equates to stable commerce.
With the increased interest, especially after the SUI airdrop news, and prominence in many trading pairs on Binance, TUSD rose to $1.2 in the USDT/TUSD pair on Binance, attracting attention.
The intense demand for crypto projects is causing stablecoins to rise
In addition to its prominence in many trading pairs on the Binance stock market, TUSD has also gained attention as a means of participating in various investment opportunities on the Binance platform, such as the SUI Launchpad. By allowing users to participate in token sales and other investment opportunities using TUSD, Binance has increased the demand for the stablecoin.
As a result of this increased demand, the price of TUSD has risen to $1.2, showing the growing importance of stablecoins in the cryptocurrency market. Stablecoins such as TUSD provide a reliable means of transferring value within the cryptocurrency ecosystem without the volatility associated with many other cryptocurrencies. This stability and reliability make stablecoins an increasingly popular choice for traders and investors looking to mitigate risk in the fast-moving world of cryptocurrency.
During a depegging event for TrueUSD (TUSD), traders saw an opportunity to gain a potential 20% profit. According to Kaiko, on-chain traders utilized Aave and Compound, two popular lending protocols, to borrow large amounts of TUSD and quickly swapped these holdings for USD Coin (USDC), another dollar-pegged token. Such a move was to effectively short, or bet against, TUSD from its elevated price
However, borrowing rates on both protocols exceeded 100% annualized due to the limited supply of TUSD.
“Binance has recently been promoting TUSD, making BTC-TUSD the only zero-fee pair on the exchange. This quickly made Binance BTC-TUSD one of the highest-volume pairs in all of crypto despite TUSD being relatively unknown amongst stablecoins.”Kaiko, the crypto analytic firm.
When the price of TUSD surged, Justin Sun sent over $50 million of TUSD to Binance, sparking speculation that he had been trying to farm SUI liquidity pools. CZ, the CEO of Binance, tweeted the other day that they would take action against any farming by Sun. Sun later admitted that one of his team members used some of the funds for farming but claimed that most of the funds would be used for TUSD market-making on the exchange.
You can read more about CZ-JustinSun tension in this article.