The crypto markets suffered some damage on Monday. However, prices for crypto have improved the next day. However, Tron’s stablecoin USDD has once again dropped to $0.974 per unit, indicating a small amount of instability continues to plague the fiat-pegged token. The dip to $0.97 follows Monday’s deviation from the parity and comes after the Tron DAO Reserve deployed large quantities of USDC to shore up the reserve’s defense.
Tron’s USDD Stablecoin Continues to Remain Lower Than the $1 Parity, Tron DAO Reserve Deploys 500M USDC
Many cryptocurrency supporters are watching Tron’s stablecoin USDD very closely after the incident that took place within the Terra blockchain ecosystem. While crypto markets saw extreme losses, the algorithmic stabilitycoin dropped to $0.977 on June 13.
During the evening trading sessions on Monday, bitcoin’s (BTC) price fell below $21K and held just above 2017’s all-time price high. Although crypto prices showed a slight increase on Tuesday, USDD remains below the $1 parity.
The current market is in an extreme state. @trondaoreserveAnother 500 million USDC was received to help defend #USDD peg. USDD collateralization rates are now 310% https://t.co/3ZdRvCB0rD pic.twitter.com/z0PXqPXKhu
— TRON DAO Reserve (@trondaoreserve) June 14, 2022
USDD trades for value between $0.97 and $0.98 at the moment of writing. But, Tuesday’s low was $0.97425353 per token. This latest low was slightly lower than that recorded on Tuesday at 3:45 AM (ET).
The drop happened after the Tron DAO reserve decided to deploy millions of USDC to defend the token’s $1 parity. “To safeguard the overall blockchain industry and crypto market, Tron DAO reserve have increased 650,000,000 USDC supply on TRON,” the organization explained. “Currently USDC supply on TRON has reached $2.5 billion.”
Sun makes headlines with at least two significant moves. Sun withdraws $500mil and $150mil USDC in USDC in Aave from 2 different wallets, which still have $1.3bily.
Consider the $26 per transaction network fee that is required to withdraw from an protocol or transfer half a billy. That’s it, Western Union pic.twitter.com/2xw08RXzBG
— Andrew T (@Blockanalia) June 13, 2022
People are concerned about USDD because it is similar to Terra’s former stablecoin UST which saw a slight de-pegging the day before it dive-bombed toward $0.704 per unit on May 9, 2022. On Tuesday, Tron’s founder Justin Sun tweeted about the USDD movement against tether (USDT).
“2pool have recovered back to 55/45 balance,” Sun said. “I believe it will be back to 50/50 in 24 hours with [a] 247% collateralization rate. Although you might be afraid, I do not see it. [a] 2% profit opportunity.” Sun also shared dataThis is tied to the Tron Network’s June 13 stablecoin transaction volume
Currently, at 7:30 a.m. (ET), the Tron DAO reserve web page shows the reserve’s collateral ratio is 246.26%. That’s roughly $1,781,291,610 at the time of writing, while the number of USDD in circulation today is 723,321,764 USDD. The collateral backing USDD’s peg consists of tron (TRX), as there’s 10.87 billion TRX held, and 14,040 bitcoin (BTC) as well.
The reserve also holds 140 million USDT, while 500 million USDC are also listed in the Tron DAO Reserve Leger. Tron DAO reserves stats reveal that DAI and other stablecoins have 100% collateral while DAI has 120% overcollateralization. Website highlights USDD’s higher collateralization than any other stablecoins.
Tron DAO Reserve Deploys 500 Million USDC to Defend Stablecoin’s Peg at 8:40 a.m. Eastern Standard
The defi protocol called Justlend, which offers a 20% APY similar to the one once offered by the Terra defi application Anchor, is Tron’s largest defi application today, with $2.36 billion total value locked (TVL). Tron’s entire TVL is $4.55 billion which means Justlend’s dominance today is 51.86%. Even with the market turmoil, Justlend saw an increase in TVL of more than 33% over the past 30 days. A $100 investment in USDD would be equivalent to $97.40, with USDD at a low point of $0.974.
Tron DAO reserve was created after USDD’s price fell to $0.97. deployedAnother 500 million USDC will be needed to protect the peg. This would bring the collateral backing to 31% by Tuesday morning at 8:40 AM ET. “For the current market extreme condition, [the Tron DAO Reserve]To defend USDD peg, has been granted 500 million USDC. Now USDD collateralization rate is 310%,” the Tron DAO Reserve tweeted.
What do you think about Tron’s stablecoin USDD dropping to $0.97 per coin? Comment below to let us know your thoughts on this topic.
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