Market News

BY  Olga Kharif, Bloomberg News

(Bloomberg) -- Deus Finance’s DEI token has lost its 1-to-1 peg to the dollar, becoming the latest failure of an algorithmic stablecoin during a period of crypto market stress.

DEI is currently trading at 70 cents, according to data tracker CoinGecko. With a market value of about $63.5 million, the token is tiny compared with the more than $18 billion TerraUSD stablecoin that shook crypto markets when it become depegged last week. 

Unlike after the TerraUSD break, the drop below the peg by DEI hasn’t exasperated concern about a broader crypto market contagion. Bitcoin fell less than 4% on Monday, while popular DeFi tokens such as Solana and Cardano were down similar amounts. 

Read more: Crypto Hedge-Fund Head Predicted Terra’s $60 Billion Implosion

Put out by Deus Finance, a marketplace for financial services, DEI is different from TerraUSD, or UST, in that it’s a fractional reserve stablecoin, backed by coin collateral, consisting of 20% DEUS tokens and 80% of other stablecoins, such as USDC.

Deus’s team is working to restore the peg, according to a Tweet.

The depegging comes several months after Deus Finance was hacked, with some coins stolen.

UST is currently trading at about 6 cents. Last week, even the world’s biggest stablecoin, Tether -- which is not algorithmic and claims to have full reserves -- lost its dollar peg before regaining it. Crypto bellwether Bitcoin is trading at less than $30,000, down from over its all-time high of almost $69,000 in November.