As weβve all seen, USDR has suffered a serious depeg.
Over a short period of time, all of the liquid DAI from the treasury was redeemed.
This led to an accelerated drawdown in the market cap.
Combined with the lack of DAI for redemptions, and liquidation timeline on real estate, panic selling ensued, causing a depeg.
Our focus now is to make users whole.
Tangible isnβt going anywhere, we have a flywheel that works and plan to continue building within that. A critical part of our shared future success is maintaining the trust weβve established with our users over the past year, which we hope to maintain through the plan below.
PLAN OF ACTION:
1. Protocol Owned Liquidity (POL) and Insurance Fund Assets
USDR is currently 84% collateralized if we mark
$TNGBL and the insurance fund to zero.
Protocol owned liquidity (POL) has been pulled from Pearl,
$USDR has been burned (the protocol canβt redeem from itself) and we have ~$2.4MM remaining in protocol-owned stables (DAI, USDC, USDT).
Additionally, we will liquidate as much of the insurance fund as possible. Liquid assets and locked token positions with an existing market will be sold.
The remaining stablecoins from POL and Insurance Fund sales will be made available to customers through the redemption process covered below.
2. Launching Baskets
Baskets, the pools of tokenized real estate, are nearly ready for launch. Theyβll play a key role in the second step of the redemption process.
USDR treasury properties will be minted into yield-generating Baskets token i.e. UK Real Estate and liquidity will be established on Pearl. Basket tokens will be a component asset in the USDR redemption.
When users receive Basket tokens, they will have the choice to hold the real estate backed tokens and collect yield via rebase, farm Basket tokens on Pearl or sell them into established Pearl liquidity. Baskets are 100% backed by tokenized real estate. Thereβs no peg, asset value is transparent. Any user can redeem basket tokens for the underlying Real Estate TNFT, burn the TNFT and take control of the SPV and Real Estate within that SPV.
Tokenized real estate can always be verified through the Transparency System we've shared in our docs.
Hedging against a lack of demand for Baskets, weβve started to prepare the process for liquidating real estate. We view this as a slower path to liquidity for users, nevertheless weβll have it as a back-up plan if Baskets liquidity is insufficient.
Thereβs no USDR βcontaminationβ in Basket assets.
3. Redeeming USDR
With Baskets deployed, weβll open redemptions. USDR will be fully redeemable for a blend of the following:
β£ Stablecoins
β£ Basket tokens
β£ Locked TNGBL 3,3+ NFTs
Even with TNGBL and the remaining insurance fund assets marked to zero, we anticipate there may be a minimal gap in USDR collateralization from Baskets and the stablecoins. Any outstanding hole will be filled with TNGBL 3,3+, priced at market, locked for one year.
4. Other Notes
At the end of the next epoch (Oct 18th) Pearl will suspend emissions for the next few weeks until the plan ahead is in execution and Basket tokens can be farmed on the exchange.
MOVING FORWARD:
As mentioned above, the flywheel weβve established works at building deep liquidity and weβll continue growing this ecosystem for tokenized RWAs. There is clear demand for the efficient delivery of off-chian yield to on-chain users and weβve become experts in this process.
That said, Tangibleβs future will not include Real USD. Weβll share a full post-mortem once weβve had a chance to unpack the last 24 hours. USDR will be deprecated once the redemption process shared above is complete.
We tried something novel with Real USD, but there were too many attack vectors in the design. Elements put in place to protect the customer were too easily manipulated to attack the protocol. We can protect our users at the current size, but as we continued scaling it may have become impossible. Our primary goal is always to protect users, thatβs why we created a stablecoin backed by real world assets in the first place.
We tried something new, we learned from the experience, and weβll keep building. New products, both announced and unannounced, will improve on what was developed for Real USD and Tangible will continue to be a leader in the category.
Weβve always done our best to protect our community and investors. In this case itβs unwinding USDR for the better good. We hope our fans will continue to join us on the journey going forward.