What does the MSUSD depeg mean for holders of the stablecoin?

MSUSD holders experienced a sharp decline in the token's market value as it traded significantly below its intended US$1 peg. MainStreet Finance stated that the issue was related to reporting infrastructure rather than the solvency of the underlying assets.

How is the MSUSD depeg affecting the Morpho market?

The MSUSD depeg pushed utilisation in the msY/USDC market on Morpho to 100%, according to blockchain security firm PeckShield. The development increased market risks and drew attention to funds with exposure to the affected market.

What does the MSUSD situation mean for AlphaUSDC Delta V2?

AlphaUSDC Delta V2, managed by AlphaPING, had approximately 30% exposure to the affected market, representing about US$18 million. The strategy's exposure has attracted attention as market participants assess the impact of the MSUSD depeg.

How is MainStreet Finance responding to the MSUSD depeg?

MainStreet Finance said it transferred more than US$8 million in USD Coin to support liquidity and is seeking alternative proof-of-reserves providers. The protocol also stated that its portfolio remains fully collateralised despite the market disruption.

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MSUSD stablecoin falls 85% below peg

Q: Why did MSUSD lose its US$1 peg?

MSUSD, a stablecoin issued by MainStreet Finance, lost as much as 85% of its US$1 peg after concerns emerged about its proof-of-reserves infrastructure and market liquidity. The sell-off followed the termination of a validation agreement between Accountable and MainStreet Finance.

Written by Jon CuthbertPublished Jun 22, 2026, 12:56 AM

MSUSD lost as much as 85% of its US$1 peg after concerns emerged around liquidity and proof-of-reserves infrastructure.
The depeg increased risks in the msY/USDC market on Morpho, where utilisation reached 100%.
MainStreet Finance said the issue was related to reporting infrastructure rather than collateral solvency and is seeking alternative proof-of-reserves providers.

MSUSD, a stablecoin issued by MainStreet Finance, fell as much as 85% below its intended US$1 peg after concerns emerged over the protocol's proof-of-reserves infrastructure and market liquidity.

The decline followed the termination of a validation agreement between Accountable and MainStreet Finance, a development that raised questions about reserve verification and triggered selling pressure.

“This is an infrastructure and reporting issue, not a solvency issue,” said MainStreet Finance.

According to blockchain security firm PeckShield, utilisation in the msY/USDC market on Morpho reached 100%, while AlphaUSDC Delta V2, managed by AlphaPING, maintained approximately 30% exposure to the market, representing about US$18 million.

MainStreet said it recently closed short-term box spread positions and transferred more than US$8 million in USD Coin to support liquidity, while stating it is evaluating alternative proof-of-reserves providers; following the developments the price of MSUSD remained significantly below its intended US$1 value.

The protocol said its portfolio is primarily composed of box spread positions that are designed to converge to fair value at maturity and remain fully collateralised when held to term.

MainStreet also acknowledged that early liquidation of positions may result in transaction costs, wider bid-ask spreads and reduced market liquidity, factors that can affect short-term redemption conditions despite the protocol's claim of full backing.