Kava Network’s USDX tumbles to $0.65 as yet another stablecoin depegs By vishal4c
A likely explanation coming via Twitter from Kava Labs, the development team behind the stablecoin, is that USDX lost the peg because of its exposure to — an algorithmic stablecoin that recently collapsed. UST accounted for some of the collateral backing USDX, along other assets including kava, cosmos, wrapped bitcoin and ether.
As UST plummeted to $0.10, losing more than 90% of its value in a week, it caused collateral liquidations that dragged USDX along. The liquidations probably contributed to USDX dislocating from the one-dollar peg,Stuart claims USDX will return to the peg because it is not an algorithmic token like UST..has significantly de-pegged and has promulgated some risk to downstream protocols that use it," Stuart said, adding that the UST risk in Kava was isolated and could be tolerated.
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