Mainstreet responds to MSUSD de-pegging: Will connect to a new reserve proof service provider and restore independent verification as soon as possible

Deep Tide TechFlow news—on June 21, regarding the MSUSD de-pegging issue, Mainstreet posted a response on the X platform. It said that concerns have emerged around the Morpho market, reserve proofs, and liquidity, but that it currently still maintains full asset backing; the related issues are not due to asset loss or insolvency.

Mainstreet said that, due to the shutdown of the reserve proof service, the oracle supporting the Morpho market is expected to pause within the next 24 hours. This has triggered market concerns and led leveraged loop borrowing users to accelerate exiting their positions, causing borrowing interest rates to rise significantly. From the perspective of net asset value (NAV), its core investment portfolio still has strong certainty, but there are liquidity discount factors arising from trading fees, the widening of bid-ask spreads, market maker discounts, and liquidity discounts based on the term and the size of the position.

Mainstreet added that it is currently taking multiple measures, including onboarding a new reserve proof service provider(s) to restore independent verification as soon as possible, redeploying liquidity to the minter/Morpho ecosystem, and—if necessary—stepping in as a last-resort liquidity provider and liquidator to prevent disorderly market fluctuations. Its current core objective is to protect NAV and maximize protocol liquidity. If borrowing interest rates continue to rise and trigger liquidations, Mainstreet is prepared to intervene as a “last liquidator” to reduce the risk of bad debts.

However, since it is currently the weekend and market liquidity is limited, market maker quotes are weaker than during normal trading hours, temporarily affecting the speed at which assets can be exited. It is expected that market conditions will become clearer over the next few days, and progress will be continuously updated. It also reminds users to beware of impersonated official accounts and malicious links—only trust information published through official channels, and do not click links of unknown origin or engage with them.