A coordinated attack caused the USD1 peg wobble but one exchange holds 93% supply

World Liberty Financial's stablecoin, USD1, briefly slipped to $0.994, which the company attributed to a "coordinated attack" involving hacked accounts and paid influencers, despite its one-to-one backing by dollars and money market funds. This event exposed the critical difference between the primary market (where tokens are redeemed one-to-one with the issuer) and the secondary market (where trading occurs), noting that redemption is not instantaneous due to friction like KYC and banking rails. A major structural risk is that Binance holds approximately 93% of USD1's circulating supply, making it the single point of failure where peg tests occur. The $0.994 wobble fell within the expected range for a "tweet shock" scenario, recovering quickly as arbitrage capital intervened. However, the article warns that stale reserve reporting and high exchange concentration mean that future rumors targeting Binance specifically could cause a cascade, leading to discounts of 1% to 5% or more if primary redemption rails are perceived as impaired. Ultimately, the lesson is that confidence and liquidity matter more than balance sheets when fear spreads rapidly.

(Source：CryptoSlate)