Stablecoin USD1 Loses $400 Million in Market Capitalization

The USD1 stablecoin, issued by World Liberty Financial, saw its market capitalization drop by $401 million. The total value of the asset fell from $4.43 billion to $4.02 billion between October 6 and October 19.

Redemptions were concentrated on the Ethereum and BNB Chain networks. Data from the Onchain Benchmark platform shows that nearly $200 million in outflows on the BNB Chain originated from a single unidentified address. These movements occurred in batches ranging from $30 million to $50 million.

On the Ethereum network, redemption volume reached $184.60 million across 63 token burn operations. More than 99% of these funds passed through the BitGo wallet, which serves as the issuer and custodian of the asset. The stablecoin supply on the Solana network remained stable during the same period.

Despite the reduction in circulating supply, USD1 maintained its dollar peg. The asset price fluctuated between $0.998 and $1.000 during the two weeks of heavy outflows. There were no reports of significant devaluation or loss of parity according to market data monitoring.

The World Liberty Financial proof-of-reserves dashboard currently shows approximately $4.01 billion in backing. The market is now awaiting operational updates regarding the project's planned change of issuer.