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Despite Overcollateralized Reserve, Tron’s USDD Stablecoin Slips to $0.974 per Token

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After the bloodbath in the cryptocurrency market on Monday, cryptocurrency prices showed some improvement the next day. However, the USDD of the Tron stablecoin fell again to $0.974 per unit, indicating that slight volatility continues to plague the fiat-pegged token. The drop to $0.97 followed Monday’s deviation from parity and came after the Tron DAO reserve posted large amounts of USDC to bolster the reserve’s defenses.

Tron USDD Stablecoin Continues to Stay Below $1 Parity, Tron DAO Reserve Deploys $500M USD

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Many cryptocurrency proponents have been following the Tron USDD stablecoin very closely following the incident that took place on the Terra blockchain ecosystem. On June 13, the algorithmic stablecoin fell to $0.977 per unit, while the cryptocurrency markets suffered huge losses throughout the day.

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During Monday evening trading sessions, bitcoin (BTC) fell below $21,000 and remained just above the all-time high of 2017. Cryptocurrency prices improved slightly on Tuesday, but USDD is still below $1 parity.

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At the time of writing, USDD traded between $0.978 and $0.98 per unit, but hit a low of $0.974253 per token on Tuesday. The most recent low is a touch lower than the drop recorded the day before, and it happened at 3:45 am (ET) on Tuesday.

The drop came after the Tron DAO reserve decided to use millions of US dollars to protect the token’s $1 parity. “In order to protect the entire blockchain industry and the cryptocurrency market, the Tron DAO reserve has increased the supply of TRON by $650,000,000,” the organization said in a statement. explained. “Currently, the USDC supply on TRON has reached $2.5 billion.”

People are worried about the US dollar because it is similar to the former stablecoin Terra UST, which lowered its peg slightly the day before it plummeted to $0.704 per unit on May 9, 2022. On Tuesday, Tron founder Justin Sun tweeted about the USDD movement. against the cable (USDT).

“2pool bounced back to 55/45 balance” – Sun said. “I believe that in 24 hours it will be back to 50/50. [a] 247% bail rate. You can see the fear here, but I see [a] opportunity to get 2% profit”. The sun also common data pegged to stablecoin transaction volume on the Tron network on June 13th.

Currently at 7:30 AM (ET) Tron DAO reserve webpage shows the reserve provision ratio is 246.26%. This is approximately $1,781,291,610 at the time of writing, while the amount of US dollars in circulation today is $723,321,764. The USDD peg collateral consists of a throne (TRX), since there are 10.87 billion TRX and 14,040 bitcoins (BTC) also.

140 million USDT is also held in reserve, and $500 million is also registered in the Tron DAO reserve book. Tron DAO reserve statistics show that other stablecoins are backed by 100% reserves, while DAI is backed by 120%. The website highlights that USDD is much more endowed than the other stablecoins featured.

Tron DAO Reserve Sets aside $500M to Protect Stablecoin Pegging at 8:40 AM EST

The defi protocol called Justlend, which offers a 20% APY similar to that once offered by the Terra defi Anchor app, is by far the largest defi Tron app with a total value of $2.36 billion locked (TVL). The entire TVL Tron is $4.55 billion, which means that Justlend’s dominance is 51.86% today. Justlend has still seen a TVL increase of over 33% over the last 30 days despite the recent market carnage. When the US dollar hit a low of $0.974, a $100 investment would only be worth $97.40.

After USDD price fell again to $0.97, Tron DAO reserve deployed another $500 million to protect the peg, bringing collateral up to 310% by 8:40 am (ET) Tuesday morning. “For the current extreme state of the market [the Tron DAO Reserve] received another US$500 million to protect the US dollar peg. The USD Collateral Rate is now 310%,” Tron DAO Reserve said in a statement.

What do you think about Tron stablecoin USDD drop to $0.97 per coin? Let us know what you think about it in the comments section below.

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Credit : news.bitcoin.com

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