Real USD (USDR), a stablecoin built on the Polygon network, has recently experienced a significant depeg, with its value plummeting to just $0.63.

TangibleDAO, the entity responsible for USDR, has attributed this depreciation to a liquidity issue.

They have reassured stakeholders that the real estate and digital assets underpinning USDR remain intact and will be employed to facilitate redemptions.

They intend to deprecate the USDR following the completion of the redemption process.

Liquidity Issue

The depeg was caused by a liquidity issue.

All the available liquid $DAI from the $USDR treasury was redeemed, leading to a rapid decline in its market capitalisation.

Coupled with the scarcity of DAI for redemptions and a pending liquidation schedule for real estate assets, panic selling occurred.

This exacerbated the depeg.

Despite this, the core issue at hand is a liquidity problem, and the assets supporting $USDR are still available for redemption.

In an effort to substantiate the assets backing USDR, stakeholders can refer to the Transparency Program in the project documentation.

Redemption Process

USDR has approximately $2.4 million in protocol-owned stablecoins (DAI, USDC, USDT).

The protocol intends to liquidate as much of the insurance fund as possible, including liquid assets and locked token positions from existing markets.

As part of the redemption, the stablecoins obtained from these sales will be offered to users during the redemption process.

The next part of the redemption process involves baskets, which are pools of tokenised real estate.

TangibleDAO has stated that these baskets will play a pivotal role in the second phase of the redemption process.

Baskets

USDR treasury properties will be minted into yield-generating Baskets tokens.

These Baskets tokens are fully backed by tokenised real estate, with no fixed peg, ensuring transparency.

Users can redeem Baskets tokens for the underlying Real Estate token and assume control of the particular Real Estate by burning the token.

TangibleDAO is also preparing for the possibility of limited demand for their baskets and has initiated a plan for the liquidation of real estate.

While this is viewed as a slower path to liquidity for users, it will serve as a backup plan if Baskets liquidity proves inadequate.

Winding Down

TangibleDAO has announced that Real USD (USDR) will be deprecated and phased out following the completion of the redemption process detailed above.

They intend to share a post-mortem analysis in due course.

On their announcement on the X (formerly known as Twitter), they stated:

"We've always done our best to protect our community and investors. In this case it's unwinding USDR for the better good. We hope our fans will continue to join us on the journey going forward."