As the market mourns the loss of the Terra (LUNA) UST and LUNA, DEI, a stablecoin, is used as a collateral mechanism for third-party instruments. It is built on the Fantom (FTM)-based decentralised finance (DeFi) protocol DEUS Finance (DEUS), and has failed to maintain its dollar peg, falling below $0.60 cents on Monday.
The price of DEI fell to an all-time low of $0.52, and its market capitalization fell from about $100 million to around $52 million. Despite the depreciation of its stablecoin, DEUS Finance’s governance token, DEUS, increased from $163.40 to $327.28 before falling to $255.36.
DEI is now trading at $0.66, with a market value of $59 million. This followed the UST and LUNA debacles, as well as a decision by Deus Finance developers to stop DEI redemptions. However, the DEI peg will be restored within the next 24 hours, according to its official Telegram channel.
While DEI is an algorithmic stablecoin like UST, it is collateralized, which means that users may mint 1 DEI by depositing collateral worth $1. These assets could include USD Coin (USDC), Fantom (FTM), Dai (DAI), WBTC, or DEUS.
DEI’s peg, like UST’s, is maintained via a system that includes the minting and burning of DEUS. Unless additional tokens are used as collateral, DEUS collateral is burnt while minting DEI. When redeeming DEI, however, DEUS is coined.
Back in March, the DeFi project was hacked, resulting in $3 million in DAI and Ether (ETH) losses. As a result, the platform decided to cancel its DEI lending contract. A day after the Deus Finance exploit, DeFi protocols Agave and Hundred Finance reported exploits that resulted in losses of $11 million in various cryptos.
 UST and LUNA, DEI, a stablecoin, is used as a collateral mechanism for third-party){kind=link}