Blast Stablecoin USDB Depegged by Over 5% Amid Market Crash

Key Points:

• Blast stablecoin USDB rebounded to $0.9838 after the crypto market suffered a severe drop today.
• USDB offers variable yields via MakerDAO’s T-Bill protocol and bridges stablecoins on Ethereum’s Layer 2.
• The rise of yield-bearing stablecoins like USDB has brought back concerns about stablecoins that have seen similar disasters in the past.

USDB, an auto-rebased stablecoin launched by Blast, plummeted earlier in the morning to $0.9421 with a staggering over 5% drop.

Read more: BLAST Token Holders Will Be Supported With 2x Points In The Future

Blast Stablecoin USDB Recovers to $0.9904 After Lost Pegs

As of press time, the stablecoin firmed up and now trades at approximately $0.9838. Tied mainly to DAI, the Blast stablecoin USDB has resumed its climb to currently sit as the twelfth-largest U.S. dollar stablecoin by market capitalization.

USDB is the creation of DeFi protocol Blast, seeking to create a variable yield, much like other yield-bearing stablecoins, such as USDE. It is collateralized by MakerDAO‘s on-chain T-Bill protocol. With 401 million tokens in its total supply and spread across 225,248 different wallet addresses, Blast stablecoin USDB ranked ninth in terms of market capitalization two months ago.

Yield-Bearing Stablecoins Raise Market Stability Concerns

Blast, an experimentative Layer 2 network built atop Ethereum, provides native yield on some crypto assets. The system’s native stablecoin is USDB, which is designed to help bridge popular stablecoins, such as USDC, USDT, or DAI, from Ethereum’s mainnet over to Blast’s L2 platform. In this way, the protocol’s rebase mechanism adjusts supply to reflect accrued yields.

It doesn’t seem that the epoch-making actions of yield-bearing stablecoins—Mountain Protocol’s USDM and Ethena’s USDE, not to mention Paxos International’s USDL—help much toward market stability. Still, the crypto community looks upon this new breed of stablecoins with suspicion, as past events still linger in people’s minds, particularly after the fiasco involving Terra’s UST and Anchor Protocol.