As reported by CoinDesk, Iron Bank Euro (ibEUR) is grappling with challenges in reestablishing its stablecoin peg following a drastic 60% decline in value on Monday. The alternative stablecoin, boasting an $11 million market cap, plummeted from its typical $0.97 to as low as $0.39 due to an imbalance in ibEUR's primary trading pool. Presently, ibEUR has rebounded to $0.72 as risk-taking traders engage in the market, anticipating a return to its Euro peg. Despite these efforts, the restoration of ibEUR to its previous price level remains uncertain, as the underlying protocol lacks the means to maintain the peg and faces a shortage of treasury liquidity for stabilizing the asset.
The detachment from its peg occurred when a single trader withdrew almost $900,000 in USDC liquidity from the Curve pool, the primary support for ibEUR trading. The pool, which was slightly tilted toward ibEUR at the time, now lacks sufficient USDC liquidity to ensure stable trading. An individual identified as Funk, a pseudonymous admin in the Keep3r Network Telegram chat linked to the project, suggested that the Iron Bank team cease their credit borrowing contract. This contract involves 2.5 million ibEUR borrowed and appears to be engaging in single-sided farming on the pools. Despite these developments, Funk has not provided any response to requests for comments.
