Research Summary

The article discusses the recent volatility of the stablecoin TUSD. The coin’s price briefly depegged from the US dollar, which was exploited by on-chain short sellers. Traders borrowed TUSD from Aave’s lending market to sell it short on centralized and decentralized exchanges. After the depeg, they bought the token back at a lower price to repay their loan. The price of TUSD has since floated above its $1 price target, suggesting a similar trade opportunity if the peg is regained.

Actionable Insights

  • Monitor TUSD’s Price: The price of TUSD has been volatile and has floated above its $1 price target. This could present trading opportunities.
  • Consider On-Chain Short Selling: Traders have been able to profit from the depegging of TUSD by borrowing the token and selling it short on exchanges. If the peg is regained, similar opportunities may arise.
  • Keep an Eye on Aave’s Lending Market: Aave’s lending market has been a source of TUSD for traders looking to sell the token short. Monitoring this market could provide insights into potential trading strategies.

Related Research