Techub News reported that msUSD, the stablecoin issued by the DeFi protocol Main Street, depegged from the U.S. dollar on June 20. During the episode, the token’s value fell sharply and was down by about 90% at one point, marking a severe break from its intended dollar peg.
The collapse was attributed to market volatility that triggered cascading liquidations, along with a deep liquidity imbalance in the collateral pool. Stablecoins are designed to maintain a reference value through reserves, collateral, or protocol mechanisms, and the msUSD incident showed that those mechanisms came under concentrated stress during the market move.
Main Street’s risk engine is attempting to stabilize reserves. The crisis involved approximately $318 billion in assets, according to the report. The event exposed design fragility in decentralized stablecoins under extreme market pressure, and the team said it is actively repairing the risk engine in an effort to restore reserve stability.