During the crisis on Oct. 11 involving real-estate-backed U.S. dollar stablecoin Real USD (USDR), a trader appears to have swapped 131,350 USDR for 0 USD Coin (USDC), resulting in a complete loss on investment.
According to the Oct. 12 report by blockchain analytics firm Lookonchain, the swap occurred on the BNB Chain through the decentralized exchange (DEX) OpenOcean, at a time when USDR depegged from par value by nearly 50% due to a liquidity crunch. A maximal extractable value (MEV) bot subsequently picked up the discrepancy, netting a total of $107,002 in profits through an arbitrage trade.
During periods of poor liquidity, slippage on DEXs can reach as high as 100%. In September 2022, Cointelegraph reported that a trader attempted to sell $1.8 million in Compound USD (cUSDC) through Uniswap v2 and only received $500 worth of assets in return. In this instance, another MEV performed an arbitrage trade before its over $1 million in profits were hacked just hours later.
On Oct. 11, USDR depegged after users requested over 10 million stablecoins in redemptions. Despite being 100% backed, less than 15% of its then $45 million in assets were backed by liquid TNGBL tokens, with the remaining backed by illiquid tokenized real-estate assets.
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