Kava Network’s decentralized USDX stablcoin has lost its peg to the U.S. dollar.
According to CoinGecko, Stablecoin has a capitalization of $115 million.
USDX fell to nearly $0.55, but later rose to $0.65.
The reasons why the asset lost its peg to the dollar are unknown.
Unlike algorithmic stabelcoins like UST, USDX can be minted as collateralized credit.
The developers reported that the USDX lost its peg because of the UST, since it was the UST that accounted for a portion of the USDX’s reserve collateral.
According to Kava Labs co-founder and CEO Scott Stewart, USDX will return to pegging because it is not an algorithmic token like UST.
“USDX is not UST. Once UST leaves the system, USDX is expected to return to its peg,” Stewart added.