Yesterday I saw something interesting in the stablecoin market. USD1, that token linked to World Liberty Financial and associated with the Trump family, briefly dropped below parity on February 23, falling to around $0.994. It was quick, just a few minutes, but enough to make everyone turn and look.

WLFI came out to explain that it was a coordinated attack. They say they compromised co-founders' accounts, spammed false information, and opened short positions to profit from the panic. The stablecoin recovered quickly, so the liquidity mechanisms apparently worked. But well, you know how the crypto community is: they compared this to what happened before the TerraUSD collapse a few years ago.

What’s interesting is that USD1 has a completely different design. WLFI maintains 1:1 reserves instead of the algorithmic system Terra used. That should theoretically give it more stability. Currently, the market cap is around $2.15 billion according to the latest data.

There was buzz on social media that Eric Trump deleted old posts about USD1 during the volatility, but no official confirmation. And then there was a rumor that ZachXBT is investigating insider trading in a major crypto, though he didn’t specify which one.

With stablecoins, everything is trust. A scare like this can cause massive panic if people start doubting the reserves. For now, USD1 recovered and remains at parity, but these kinds of events always raise questions about how solid these new tokens are, especially when they are so closely linked to public figures.