Apyx's apxUSD stablecoin fell to 93 cents amid Bitcoin's price drop, but the protocol claims this volatility is expected and manageable.
Apyx's apxUSD stablecoin dipped to 93 cents on Wednesday.
Apyx's apxUSD stablecoin experienced a temporary depeg, falling to 93 cents as Bitcoin's price dropped below $63,000. This event has raised concerns among market participants, although the protocol asserts that such fluctuations are expected in the current market environment.
As Bitcoin fell below the $63,000 mark, apxUSD was reported to have declined from its typical $1 peg, according to CoinMarketCap. The stablecoin is primarily backed by preferred equity from digital asset treasury firms, particularly STRC shares from Strategy, which have a par value of $100.
The protocol has emphasized that the value of apxUSD can be affected by the performance of its underlying assets, particularly when STRC trades below its par value. This relationship contributes to the stablecoin's volatility in secondary markets.
"This is not a bug; it is the expected behavior of a stablecoin backed by preferred equity rather than cash deposits," Apyx stated in a post on X, urging holders to view these events as part of the asset class's normal cycle.
To manage potential stress on the peg, Apyx has implemented a stability model that includes mechanisms to increase dividend rates, which can enhance demand for the underlying shares. The protocol has noted that historically, STRC has rebounded to its par value after experiencing dips.
Apyx maintains that its collateral values exceed the circulating supply of apxUSD, providing a buffer against market fluctuations. Users can track the collateral status in real-time via the app dashboard, which aims to reassure holders amid ongoing market volatility.
Concerns regarding possible cascading liquidations in Morpho lending markets were also raised, but Apyx clarified that the primary influences on the apyUSD/apxUSD Morpho market are dividend accruals rather than the spot price of STRC, suggesting that these fluctuations should not trigger liquidations.
