Tron’s USDD Stablecoin Loses its Peg, $700M Injected to Recover PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Tron’s USDD Stablecoin Loses its Peg, $700M Injected to Recover

Time Stamp: June 13, 2022 8:50 AM

Tron's USDD

After the news that TronDAO has purchased $50 Million in Bitcoin And TRX to add to Its USDD reserves, the peg of Tron’s USDD lost about 3% today with the lowest price at $0.97. In light of this, TronDAO has vowed to deploy $2 billion in USDC to support a re-peg. TronDAO Injects $700M to Re-Peg its USDD Earlier today, Tron’s founder Justin Sun hinted that the blockchain network’s algorithmic USDD stablecoin lost its peg brought about by a negative funding rate for TRX shorts on Binance which amounted to -500% APY. As a result, USDD lost about 3% of its value to trade down to $0.97. Sun further opined that the condition will be resolved shortly and the de-peg won’t even last for 24 hours. To facilitate the re-peg, he said that $2 billion in TronDAO reserves will be poured in to fight the Binance shorts funding rates. Funding rate of shorting #TRX on @binance is negative 500% APR. @trondaoreserve will deploy 2 billion USD to fight them. I don’t think they can last for even 24 hours. Short squeeze is coming. pic.twitter.com/VRExM6UK70 — H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 13, 2022 A few minutes later, he updated saying that about $700 million worth of USDC has already been deployed as part of the $2 billion reserves set aside to support USDD. At the time writing, USDD somewhat recovered and is currently trading at $0.99 from its earlier $0.97 levels. 700 million USDC has been injected into @trondaoreserve for #USDD peg. Well done! https://t.co/r11PnBte4g — H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 13, 2022 Is USDD Headed for the Same Fate As UST? Similar to Terra’s UST Stablecoin, Tron’s USDD is an Algorithmic Stablecoin backed by TRX and BTC. USDD also plans to manage a reserve of $10 billion in various cryptocurrencies to support its peg. This is similar to LFG’s intention to hold $10 billion in bitcoin and AVAX to support UST’s peg. However, Founder Justin Sun plans to focus on healthy growth by keeping its market cap lower than TRX, the Tron DAO reserve, and the entire crypto market cap. He stated that the reserve would mainly consist of Bitcoin, TRX, and other top stablecoins such as USDT, USDC, BUSD, DAI, and TUSD. Mostly, stablecoins are taken into consideration because if USDD falls below its anchor, it would gradually take time to liquidate other assets.

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