Overview
Tangible is a protocol for tokenizing physical real-world assets and bringing them on-chain. The platform allows users to purchase tokenized representations of gold bars, real estate, wine, watches, and other physical goods, with the physical assets custodied by Tangible's network of partners. The project operates primarily on Polygon.
Tangible's most significant and controversial product was USDR (Real USD), a stablecoin backed primarily by tokenized real estate (TNFTs representing UK rental properties), DAI, and TNGBL token emissions. USDR launched with the promise of a yield-bearing stablecoin backed by real assets -- a compelling narrative that attracted over $50 million in deposits.
In October 2023, USDR catastrophically depegged, dropping from $1 to approximately $0.45. The depeg was triggered by DAI redemptions that drained the liquid portion of reserves, leaving USDR backed almost entirely by illiquid tokenized real estate that could not be redeemed on-demand. This event exposed the fundamental design flaw: a stablecoin backed by illiquid assets cannot maintain its peg during bank-run conditions.
Technology
Tangible's technology includes a tokenization platform (Tangible Store), a marketplace for trading TNFTs (Tangible NFTs representing physical assets), and the USDR stablecoin infrastructure. TNFTs are minted when physical assets are purchased and custodied, creating an on-chain representation linked to off-chain property or goods.
The real estate tokenization uses UK property SPVs, with rental income flowing to TNFT holders. The marketplace enables secondary trading of TNFTs. The technology is functional but relies heavily on off-chain operations -- property management, custody verification, rental collection -- that cannot be trustlessly verified on-chain.
The USDR design attempted to combine illiquid real estate backing with stablecoin fungibility, a structurally unsound approach that the depeg conclusively proved. The lesson: stablecoins require liquid reserves that match the redemption profile of the liability.
Asset Quality
Tangible's physical asset portfolio includes real estate (UK rental properties), precious metals, and luxury goods. The real estate assets generate genuine rental income and have real intrinsic value. However, the USDR crisis exposed a critical issue: asset quality and asset liquidity are different things.
UK rental properties are quality assets in a traditional investment sense -- they generate income and appreciate over time. But they cannot be liquidated in hours or days when stablecoin holders want immediate redemptions. The mismatch between asset maturity (illiquid real estate) and liability maturity (instant-redemption stablecoin) is a classic financial engineering failure.
Post-depeg, the remaining USDR backing consists primarily of these illiquid real estate TNFTs. Holders face an extended unwinding process as properties are sold over time to return value. The eventual recovery depends on UK property market conditions and the team's execution of the unwinding.
Compliance
Tangible operates in a gray regulatory area. Physical asset tokenization requires compliance with securities law, property law, and custody regulations across multiple jurisdictions. The UK real estate operations require proper legal structuring, property management licensing, and tenant law compliance.
The USDR depeg raised serious questions about whether the stablecoin constituted an unregistered security and whether adequate disclosures were made about the illiquidity risk of the backing. Regulatory scrutiny of the project has increased post-depeg. The team has not been subject to enforcement action as of this writing, but the regulatory landscape remains unfavorable and evolving.
Adoption
Pre-depeg, Tangible attracted meaningful adoption with over $50 million in USDR deposits and an active TNFT marketplace. The real-estate-backed stablecoin narrative resonated with yield-seeking DeFi users tired of purely algorithmic or crypto-backed alternatives.
Post-depeg, adoption collapsed. USDR deposits evaporated, trust was destroyed, and new user acquisition effectively halted. The Tangible Store continues to operate for physical asset tokenization, but the platform's flagship product failure dominates its reputation. Recovery requires rebuilding trust from near-zero -- a challenging prospect given the severity of losses.
Tokenomics
The TNGBL governance token provides platform fee sharing, governance rights, and was used as partial backing for USDR (a problematic circular dependency). TNGBL's inclusion in USDR reserves meant that a decline in TNGBL price directly weakened USDR backing -- a reflexive doom loop similar to Terra/LUNA.
Post-depeg, TNGBL has lost the majority of its value. The token's utility (governance, fee sharing) depends on platform recovery, which depends on adoption recovery, which depends on trust recovery. This creates a negative feedback loop.
Risk Factors
- USDR depeg: Catastrophic stablecoin failure with over 50% loss for holders
- Illiquid backing: Real estate assets cannot be liquidated fast enough for stablecoin redemptions
- Trust destruction: Post-depeg credibility extremely difficult to rebuild
- Circular tokenomics: TNGBL used as USDR backing created reflexive risk
- Off-chain dependencies: Physical asset custody and management require trust in centralized operators
- Regulatory risk: Tokenized stablecoin backed by real estate faces uncertain regulatory treatment
- Concentration: UK real estate focus creates geographic and market-specific risk
Conclusion
Tangible's USDR depeg is a textbook case study in maturity mismatch -- the same failure mode that causes bank runs in traditional finance. Backing a stablecoin with illiquid real estate was structurally unsound regardless of the quality of the underlying properties. The lesson is clear: stablecoins require reserves that match the redemption timeline of the liability. Real estate generates income and appreciates, but it cannot be liquidated on-demand when holders panic.
The broader Tangible platform for physical asset tokenization has technical merit, but the USDR disaster has severely damaged trust and adoption. Recovery is possible but requires years of flawless execution and a fundamentally redesigned stablecoin model (or abandonment of the stablecoin concept entirely). Investors should approach Tangible with extreme caution given the demonstrated risk management failures.