Kava Wire announces the release of its May 2022 Kava projections, especially as its stablecoin, USDX, recently traded below its peg. The minting of the USDX is backed by terraUSD (UST) which Kava Labs announced as collateral asset.
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Experts warned of a possible continuous downward trend for USDX as it recently lost its parity with the US dollar, details the new report by Kava Wire. In a recent trading, the stablecoin dipped to almost 0.55, and is now being exchanged at $0.65.
More details can be found at https://kavawire.com/kavas-usdx-lost-the-peg-due-to-exposure-to-terrausd-an-algorithmic-stablecoin-that-recently-collapsed
The announcement has raised the eyebrows of many DeFi analysts, as they determine what may have caused USDX to lose its dollar parity. They suggest that the dip could be related to the recent collapse of UST – the exposure of USDX to UST causing a domino effect. In fact, the May 2022 Kava Wire report cites Scott Stuart, co-founder and CEO of Kava Labs, mentioning that the liquidations of UST probably contributed to USDX dislocating from the one-dollar peg.
Kava is a next-generation decentralized lending platform that has shifted the way investors operate within the blockchain. Offering a unique lending strategy, Kava provides an extensive array of products, including collateralized loans and stablecoins.
It was developed by blockchain enthusiasts who wanted to streamline the decentralized lending sector through the integration of a variety of proprietary technologies. Similar to all products within the blockchain, the main advantage of Kava was its transparency to all its users – those who wish to file for a loan could do so with peace of mind that their loans were visible to everyone in the system.
USDX is the stablecoin for the Kava network. This financial instrument is what users receive and pay back their loans in. To further strengthen its stability, USDX used UST as a collateral asset, which may explain its recent downward trend. Stuart has stated that because the two are different assets, USDX is anticipated to go back to its peg after a few months.
Kava Wire is an online digital resource for everything cryptocurrency-related. It places a focus on Kava Wire and USDX. Readers are encouraged to regularly visit the site as it constantly releases new reports on the token and other stablecoins.
Interested parties can find more information by visiting https://kavawire.com
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Organization: Kava Wire
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Website: https://kavawire.com
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