Following the failure of Terra UST and the current cryptocurrency market volatility, many eyes have been on the Tron-based USDD algorithmic stablecoin. June 13 crypto asset tron (TRX) dropped significantly in price, and Tron founder Justin Sun talked about traders short selling the digital currency. Sun explained that the Tron DAO reserve would send $2 billion to “fight them” and said he didn’t think the shortened ones could last 24 hours. In addition, the USDD stablecoin fell slightly on Monday, dropping to $0.977 per unit during the crypto market carnage.
Another stablecoin fluctuates as the value of the crypto economy plummets – Tron DAO reserve rolls out USDC to protect USDD peg
On one of the blackest Mondays in the world of stablecoin crypto assets U.S. dollar fell to $0.97 per unit, and the Tron DAO reserve had to allocate funds to protect the $1 parity. “For extreme market conditions [Tron DAO Reserve] received $700 million in defense [the] peg to the US dollar. Now the level of collateral in US dollars is almost 300%,” the organization noted. tweeted.
While a quick drop to $0.97 is not the biggest deal for some investors, and U.S. dollar returned to the $0.99 area, the same thing happened to UST the day before the much larger depeg. It is also said that Tron’s native asset TRX traders are actively shorting, and Justin Sun explained that $2 billion offset short positions causing a short squeeze.
“Short Selling Funding Rate TRX on Binance minus 500% per annum, ”- Sun tweeted. “[Tron DAO Reserve] send 2 billion dollars to fight them. I don’t think they can even last 24 hours. [A] a short squeeze is coming,” he added.
Sun Believes Overcollateral Will Make Market Participants ‘More Comfortable’ With USDD
Tron DAO Reserve then announced a series of purchases intended to protect the peg. After purchasing US$700 million, the organization bought another $100 million and then another 100 million more USDC after that.
“Currently, the USDC offer on TRON has reached $2.5 billion,” the Tron DAO reserve noted after addition of US$650 million to reserve. Tron claims that USDD support will be secured at least 130%, and Sun believes this method will make investors more comfortable with the stablecoin.
“We want USDD to be overcollateralized, which I think will make market participants more comfortable using us in the future,” Sun. Bloomberg said June 5th
What do you think of the Tron USDD stablecoin and its fight against market carnage? Let us know what you think about it in the comments section below.
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