Deus Finance’s stablecoin dei (DEI) is another so-called stable coin that has lost its peg to the US dollar, falling below 60 cents, similar to TerraUSD (UST). DEI lost its peg on Monday and is still a long way from recovering its near-dollar value.
DEI was trading at $0.5657 at the time of writing on Tuesday. According to CoinGecko data, the price of DEI has dropped by more than 42 percent in the last seven days. The DEI value has dropped by more than 15% in the last 24 hours.
The price of DEI has not risen despite Deus’s announcement on Monday on its official Telegram channel that the peg will be restored within the next 24 hours.
What exactly is DEI crypto?
DEI operates within Deus, a Fantom-based decentralized finance (DeFI) project. Users can obtain 1 DEI by depositing $1 in collateral in the form of assets such as USDC, Fantom(FTM), DAI, WBTC, or Deus.
DEI, like UST, is an algorithmic stable coin. Arbitrage bots are constantly monitoring and adjusting the DEI collateral ration. To maintain the peg, these bots constantly exchange $1 worth of underlying tokens for 1 DEI or vice versa.
According to crypto market observers, the DEI price plummeted after traders exchanged their DEI tokens for USDC.
The current crash in the global crypto market has revealed the flaws of algorithmic stable coins. In theory, they should be automatically pegged to the price of another cryptocurrency.
Meanwhile, the price of Deus has dropped by approximately 26% in the last 24 hours and by 64% in the last 7 days. In the last month, the price of Fantom (FTM) has dropped by more than 68 percent.
The Terra fiasco has resulted in a sell-off of many other so-called stable coins, including DEI, Waves’ stablecoin USDN.
TerraUSD is now worth around 12 cents, while Terra (Luna) per token price has dropped almost to zero from a recent high of over $100.
