Huobi Stablecoin Plunges 70% as Justin Sun Readies Tron Replacement
The native Huobi stablecoin has now totally depegged from the US dollar, with the crypto exchange promising to swap tokens with Tether
key takeaways
- Justin Sun, who now plays a key role at Huobi, plans to replace HUSD with his own USDD
- HUSD’s recent plunge likely marks the end for the crypto exchange’s native stablecoin
The swansong for Huobi Global’s dollar-pegged stablecoin is now playing out. HUSD fell to a low of 28 cents this morning, four days after the crypto exchange announced it would delist the token.
Huobi, one of the largest crypto exchanges in the space, was recently snapped up by a Hong Kong-based asset management firm About Capital, which is reportedly spearheaded by Justin Sun.
While Sun has denied being in charge of About Capital (as he initially did when he acquired Poloniex), the controversial crypto entrepreneur is an official Huobi advisor following the deal. Sun told CoinDesk earlier this month that Huobi would “probably list all the cryptocurrency against USDD,” a Tron-based stablecoin.
Huobi recently said all users’ HUSD would be converted to Tether (USDT) at a 1-to-1 ratio. The stablecoin was launched in September 2019, with its market capitalization briefly peaking at $1 billion in May 2021.
However, HUSD since failed to capture significant market share, hovering as low as $80 million last month. HUSD no longer features on Huobi but the token continues to trade on decentralized exchanges, with MDEX contributing nearly 90% of the daily trade volume.
All this while Huobi may be undergoing a complete overhaul of its teams. China-based journalist Colin Wu reported on Saturday that Sun’s TRON team appears to have taken charge of key divisions at the crypto trading firm, and Huobi’s current strength of 1,600 may be downsized as Sun believes there are too many employees.
In a tweet on Monday, Sun said his team was “extremely cautious” about the company’s future staff arrangements. Huobi didn’t return Blockworks’ request for comment by press time.
Huobi indeed appears to be in flux, but stablecoins have faced several headwinds over the last few months, including increased regulatory focus and changes in market perception from recent high-profile incidents like the collapse of Terra.
NEAR protocol recently shelved its own algorithmic stablecoin USN to avoid another Terra-like situation.
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