Canto, a blockchain built on the Cosmos network, recently faced significant challenges with its native stablecoin, NOTE. The stablecoin sharply dropped below $0.6 today but has since recovered to around $0.96. This incident follows a recent period of downtime on the Canto network, which led to a substantial loss of Total Value Locked (TVL).
Canto’s Recent Challenges
Canto, a Layer 1 (L1) blockchain based on the Cosmos network, has been in the spotlight recently due to issues with its native stablecoin, NOTE.
Earlier today, NOTE experienced a sharp depeg, dropping below $0.6. A stablecoin is designed to maintain a stable value, usually pegged to a fiat currency like the US dollar. When a stablecoin “depegs,” it means its value has moved significantly away from its $1 stable price, causing concern among users and investors.
According to reports, the depeg of NOTE stablecoin is linked to a series of problems Canto faced over the past few weeks. Canto experienced a prolonged downtime, meaning the blockchain was not functioning properly for some time. After the network was restarted, a significant amount of Total Value Locked (TVL) was lost. This loss of TVL weakened the overall ecosystem of Canto.
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One of the major issues was the loss of stablecoin assets on the cross-chain bridge. When assets were lost on Canto’s cross-chain bridge, it led to a loss of confidence in NOTE, causing its value to fall sharply.
Recovery and Investor Concerns
After falling below $0.6, NOTE has now recovered to around $0.96. While this is closer to its expected value, the incident has raised concerns among Crypto investors about the stability of Canto and its ecosystem. The sudden drop in value and the problems with the blockchain’s operation highlight the risks associated with new and emerging blockchain projects.
Read also: WazirX Customers Question Possible Insider Involvement in Recent Crypto Hack
Canto’s Stablecoin NOTE Recovers After Major Depeg, Raising Concerns Among Investors
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