apxUSD, a synthetic stablecoin developed by Apyx Finance, has moved significantly away from the dollar peg due to increasing concerns about its collateral structure.
apxUSD, primarily backed by Strategy’s preferred stock product STRC, lost up to 36% of its value during the day, falling from the $1 level. The token is currently trading just under $0.76.
According to information on Apyx Finance’s website, the project is described as a “dividend-backed dollar protocol” that converts preferred stock assets issued by Digital Asset Treasury companies into digital dollars. The project states that it aims to offer double-digit returns through diversified baskets of preferred stocks.
The project documentation states that apxUSD currently uses STRC as its primary collateral asset. STRC is described as a variable-rate, non-convertible, perpetual preferred stock product issued by Strategy. The product is structured around a nominal value of $100 per share, with dividends determined and paid on a monthly basis.
Related News Vitalik Buterin Reveals: Major Changes Are Coming to Ethereum — It Had Been Heavily Criticized
However, the sharp drop in STRC’s market price has raised questions about apxUSD’s ability to maintain its stability. STRC fell as low as $73.62 during the day before trading around $78. This decline has sparked debate in the market about apxUSD’s collateral quality and whether it can return to $1.
Cryptocurrency investor Vinny Lingham argued that it is extremely difficult for STRC to return to $100. Lingham stated that STRC would need to trade at approximately a 20% discount to offer an effective return of $14.5, adding, “The market speaks for itself. Damage has been done.”
Lingham also argued that Strategy founder Michael Saylor’s next steps have become more difficult, likening the situation to the “zugzwang” concept in chess. This term describes situations where a player is forced to make a move, but each move will worsen their position.
*This is not investment advice.
