On May 5, Tron’s algorithmic stablecoin USDD went live and so far, the fiat-pegged token has been listed on a number of decentralized finance (defi) protocols. Two days later, the Tron DAO Reserve announced it purchased 504.6 million tron (TRX) to back the algorithmic stablecoin, as the project aims to leverage a decentralized forex reserve similar to Terra’s UST reserves.
Tron DAO Reserve, Justin Sun Reveal a $38 million TRX Purchase
Terra’s UST reserve system is becoming a popular scheme, and Tron’s USDD stablecoin project is following the pattern. Bitcoin.com News reported on Tron’s algorithmic stablecoin project on April 21, and since then the fiat-pegged crypto asset has officially launched. It has been officially launched. number of partnersNow, USDD can be listed on Pancakeswap and Kyberswap.
According to tronscan.org, there’s approximately 211,245,005.49 USDD at the time of writing. According to statistics, Uniswap version 3.0 (v3) has been the most active USDD exchange for buying and selling USDD. While USDD’s $211 million market capitalization is small potatoes to Terra’s UST ($18.7B), its only been around for two days. USDD was up $2.31 million over the previous day. Terrausd (UST), however, saw $990.3 Million in 24-hour trades. USDD’s market valuation is larger than gemini dollar’s (GUSD) $199.5 million market capitalization.
On Saturday, the Tron DAO and Tron’s founder Justin Sun announced that the team purchased 504,600,250 TRX at an average price of 0.07727 per unit. The purchase will be used as a reserve asset to “safeguard the overall blockchain industry and crypto market,” Tron DAO Reserve account saidOn Saturday afternoon.
“[Tron DAO Reserve] has done its job,” Tron’s founder Justin Sun tweetedThis weekend.
Decentralized, Algorithmic, and Centralized — The Quest to Perfect the Stablecoin Continues
Although decentralized, algorithmic stablecoins may sound great in theory there are some concerns. questionsAsk them whether or not they are capable of maintaining a stable peg as long as the existing ones exist. Of course, some centralized stablecoin projects in the past have failed, and Makerdao’s decentralized DAI stablecoin was tested during the March 12, 2020 ‘Black Thursday’ event. Makerdao uses an over-collateralization (OC) process to secure DAI’s USD peg, and two years before the March 12th event, Bennett Tomlin’s blog post predicted ethereum’s (ETH) price stress that could affect DAI’s USD peg.
Origin Protocol, OUSD stablecoin issuing bank, was hit with a sudden loan attack on November 20, 2020. This caused the coin to temporarily lose its peg. Waves-based stablecoin Neutrino Usd (USDN), dropped temporarily from its dollar pegged price in the first week. A year ago in April, the stablecoin fei usd’s (FEI) fiat value sunk below a dollar for a short period of time. A number of those mentioned projects has rebounded quickly following the lost peg. The stablecoin projects, however, have maintained their stable peg ever since.
Tron DAO Reserve purchased 504,600,000.250 TRX for $38.99million at settlement. This TRX purchase follows the Luna Foundation Guard’s recent $1.4 billion acquisition of bitcoin (BTC). To protect UST, the non-profit LFG holds now 80,394 BTC. It also has $100 million of AVAX. Tron DAO also has three cryptocurrency institutions that have been whitelisted Tron DAO reserve members. Tron DAO Reserve institutional partners include Poloniex, Alameda Research, and Amber Group, while Tron DAO Reserve acts as USDD’s “early custodian.”
What do you think about Tron’s algorithmic stablecoin USDD? What do you think about the project purchasing $38 million in TRX to safeguard the stablecoin’s peg? Comment below to let us know your thoughts on this topic.
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