After the fallout from Terra UST and the current volatility in the crypto market, many eyes have focused on the Tron-based USDD algorithmic stablecoin. On June 13, the crypto asset tron (TRX) dropped significantly in value and Tron founder Justin Sun talked about traders shorting the digital currency. Sun explained that the Tron DAO reserve would deploy $2 billion to “fight” them and said he didn’t think the shorts could last 24 hours. Additionally, the USDD stablecoin took a small dive on Monday, falling to $0.977 per unit amid the crypto market carnage.
Another Stablecoin Swings, as Value of Crypto Economy Drops Massively – Tron DAO Reserve Deploys USDC to Defend USDD Peg
On one of the darkest Mondays in the world of crypto assets, the stablecoin USDD fell to $0.97 per unit and the Tron DAO Reserve had to deploy funds to defend the $1 parity. “For the extreme market condition, [Tron DAO Reserve] received 700 million USDC to defend [the] USDD parity. Today, the USDD collateralization rate is nearly 300%,” the organization said. tweeted.
Although a quick dip to $0.97 might not be the biggest deal for some investors, and USDD returned to the region of $0.99, the same happened to UST the day before the massively larger depeg. It is also said that the native asset of Tron TRX is heavily shorted by traders and Justin Sun explained that $2 billion will offset shorts causing short compression.
“Short Circuit Funding Rate TRX on Binance is negative 500% APR”, Sun tweeted. “[Tron DAO Reserve] will deploy 2 billion USD to fight them. I don’t think they can last even 24 hours. [A] a short squeeze is coming,” he added.
Sun thinks oversizing will make market participants “more comfortable” with USDD
Then the reserve Tron DAO announced a number of buys to defend the peg. After the purchase of the 700 million USDC, the organization bought an additional 100 million USDC, then another 100 million more USDC after that.
“Currently, USDC’s offer on TRON has reached $2.5 billion,” remarked the Tron reserve DAO after adding 650 million USDC to the reserve. Tron’s assertion is that USDD support will be oversized by at least 130% and Sun believes this method will make investors more comfortable with the stablecoin.
“We want USDD to be oversized, which I think will make market participants more comfortable using us in the future,” Sun said. told Bloomberg June 5.
What do you think of the Tron USDD stablecoin and its fight against market carnage? Let us know what you think about this topic in the comments section below.
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