World Liberty's USD1 Stablecoin Sheds $400M in Two Weeks

The market capitalization of USD1, the stablecoin tied to World Liberty Financial, fell by about $400 million in two weeks, from $4.43 billion on Oct. 6 to $4.02 billion on Oct. 19, a 9.1% drop, Cointelegraph reported, citing CoinGecko data and World Liberty's proof-of-reserves dashboard. The token kept its dollar peg, trading between $0.998 and $1.000 with no sustained depeg.

Details

Where supply shrank. According to the report, about $184.6 million of USD1 was redeemed on Ethereum across 63 burns and about $200.4 million on BNB Chain across 12 burns. Nearly $200 million of the BNB Chain total came from a single unidentified address redeeming in batches of $30⁠–⁠50 million. Supply on Solana was unchanged at roughly $1.42 billion.

Versus other stablecoins. From Oct. 6 to 15, USD1 supply on Ethereum fell 11.45%, compared with 4.93% for USDe, 2.18% for USDC and 0.76% for USDT.

Cross-check. DefiLlama showed USD1 circulation of about $4.03 billion at the time of checking, versus roughly $4.27 billion a week earlier and $4.37 billion a month earlier, which is consistent with the downtrend.

What it means for the market

Redemptions are not the same as losing the peg: the token stayed at $1, and a large holder's exit can have many causes, none of which the sources name. Research firm Onchain Benchmark notes that the next test for USD1 comes with the change of issuer, when World Liberty moves issuance to a trust company.

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