Will the USD1 from Trump's family stabilize if it is not widely adopted and unpegged?

"Having connections in the court" does not equal "no worries ahead", 200 million USD sent USD1 for a passive emergency test.

Written by: Ding Dong (@XiaMiPP), Planet Daily

On July 29th at 6 PM, the stablecoin USD1 experienced a brief de-pegging, dropping to a low of 0.9934 USDT, deviating from its 1:1 dollar peg. Subsequently, the price of USD1 gradually recovered, and as of now, it has stabilized at 0.9984 USDT. This brief fluctuation has attracted market attention.

USD1 De-pegging Truth

From the current discussions and speculations in the community, the direct trigger for this decoupling event may be closely related to the IKA Launchpad event launched by Gate exchange on July 26. This event offered a total of 200 million IKA tokens for subscription, and users could participate using USD1 or Gate's native token GT. The subscription price was set at 1 IKA = 0.001424 GT = 0.025 USD1. According to data disclosed by Gate, as of July 28, the total subscription amount for the USD1 pool had already surpassed 200 million USD. Such a large-scale subscription indicates the market's enthusiasm for the IKA project, but it may also lay the groundwork for selling pressure on USD1.

We noticed that the IKA subscription event officially ended at 1 PM on July 29. Looking at the price trend, the initial drop of USD1 began shortly after this, and the decline continued until around 6 PM that afternoon. This timeline aligns closely with the depegging event, further confirming the possibility of "increased sell pressure due to capital outflow after the event ended." Some participating users may have chosen to quickly cash out their USD1 after completing their subscriptions, resulting in a concentrated sell-off.

USD1 is issued by World Liberty Financial (WLFI), officially positioned as a "low volatility digital asset option," aimed at providing users with a stable medium for cryptocurrency asset trading by being pegged 1:1 to the US dollar. According to its white paper and audit reports, the reserve assets of USD1 mainly include US short-term treasury bonds and US dollar deposits, which theoretically should possess strong redemption capability and price anchoring mechanism.

However, from a more macro perspective, the recent decoupling exposes the vulnerability of small to medium-sized stablecoins under high intensity capital movements. According to data from stablecoins.asxn.xyz, the current total market size of stablecoins has reached 265.59 billion USD, with USDT holding an absolute leading position at 164.57 billion USD, while the circulation size of USD1 is only 2.19 billion USD, accounting for about 1.3%. From an absolute value perspective, such a market size is still insufficient to bear large-scale application pressure, let alone the sudden influx and rapid exit of 200 million USD in subscription funds. For USD1, this is not just a practical test, but more like a passive stress test.

Backed by Trump, resource advantages begin to emerge

Looking at the current situation, although USD1 experienced a brief decoupling in this event, it also confirms the advantages it possesses in terms of market resources from another perspective. Unlike traditional stablecoins that rely on an on-chain ecosystem for self-sustaining growth, USD1 is backed not only by the financial resources of World Liberty Financial but also by the political and capital network of the Trump family as endorsement. Because of this, USD1 has been able to quickly enter some cryptocurrency projects for fundraising, trading settlement, and Launchpad segments, becoming an increasingly appealing "strategic stablecoin" option that more and more platforms are willing to guide users to use.

However, "having backing" does not equal "no worries ahead." The lessons learned from the IKA Launchpad incident have fully demonstrated that the market's recognition of resource backgrounds cannot replace the verification of mechanism safety. When USD1 becomes a key entry point in crypto applications, its own resilience, liquidity design, and user confidence mechanisms will be the real core factors determining whether it can be "used" in the long term.

Especially in the face of liquidity shocks of hundreds of millions of dollars within a short period, the issues exposed by USD1 deserve high attention from WLFI. The political halo of the Trump family can bring repeated attention dividends, but only by transforming this attention into use cases and consolidating these use cases into ecological inertia can USD1 possibly grow from an empowered chip into a strong participant in the stablecoin landscape.