The USDX stablecoin based on the Kava Network has lost its binding to the US dollarThe decentralized USDX stablecoin based on the Kava Network has lost its binding to the US dollar.
According to CoinGecko, the capitalization of the stablecoin is $115 million.
The USDX fell to almost $0.55, but later rose to $0.65.
The reasons why the asset has lost its peg to the dollar are unknown.
Unlike algorithmic stablecoins like UST, USDX can be minted in the form of a loan secured by collateral reserves.
The developers reported that USDX lost its binding due to UST, since UST accounted for part of the USDX backup.
According to Scott Stewart, co-founder and CEO of Kava Labs, USDX will return to binding because it is not an algorithmic token like UST.
"USDX is not UST. As soon as UST exits the system, it is expected that USDX will return to its binding," Stewart added.
