Seven days ago, Bitcoin.com News reported on the Tron DAO Reserve purchasing $38 million in tron to safeguard the network’s stablecoin USDD. Since then and since the terrausd (UST) de-pegging event, the Tron DAO Reserve has continued to purchase large quantities of digital assets to bolster the project’s reserves. The organization also purchased tron and has added stablecoins to its mix.
While Terra’s Stablecoin Imploded, Tron’s Algorithmic Dollar-Pegged Crypto Project Purchases Millions Worth of Tron, Bitcoin, and Tether to Defend USDD
All eyes were on Terra Blockchain and its native crypto assets LUNA, UST and Terra. The USD and UST currencies were both heavily devalued, with more than $46 trillion in crypto currency value disappearing from the cryptocurrency economy within three days. Despite all this chaos, Tron DAO Reserve continued to buy crypto assets in order to fund its forex-based digital currency reserves. On May 7, Bitcoin.com News reported on Tron’s founder Justin Sun and the Tron DAO Reserve purchasing $38 million in tron (TRX).
Despite all the market chaos that followed the UST crash, Tron has maintained its purchase of crypto since then. Tron’s stablecoin USDD is also an algorithmic dollar-pegged crypto asset that has similarities to Terra’s UST. Tron DAO reserve was established after 504.6 million tron were purchased (TRX). tweeted that the team aims to “guard the overall blockchain industry and market, prevent panic trading caused by financial crises, and mitigate severe and long-term economic downturns.” The Tron DAO Reserve (TDR) further added:
Additionally, as early custodians of USDD, we manage its permissions and provide price stability via reserves.
The TDR added funds to the reserve over the past week, following the purchase of 504.6 million tron. “To safeguard the overall blockchain industry and crypto market, Tron DAO Reserve have bought 500 BTC with an average price $31,031.35 for $15,515,675,” TDR detailedOn May 10, TDR was also released on May 10. saidFor $45.6 million, it bought 595 729 832 tron. The crypto market was volatile that day, but the TDR team was able to stabilize the situation. noted “USDD holds steady in today’s market volatility.”
Purchase MOAR https://t.co/DVG3sIWlic
— H.E. Justin Sun 🅣
(@justinsuntron) May 12, 2022
On May 11, TDR Team was formed. tweeted: “To safeguard the overall blockchain industry and crypto market, [TDR] have bought 1,000 BTC with an average price of $30,096 for $30,096,000.” Following that purchase, the TDR organization bought1.467,612,695 TRX to $97 millions for reserves Following the acquisition of $97 millions worth of tron, TDR started buying stablecoins. TDR Team explainedOn May 12, 2012:
To ensure the safety of both crypto markets and blockchain industries in general [TDR]Have bought 100,000,000 USDT at an average cost of $0.982 and $98,200,000.
The TDR team did not stop there and has continued to purchase more coins to safeguard the Tron network’s stablecoin USDD. On May 12, the TDR stated that it purchased200,000,000 USDT at $0.985/unit, which equated to approximately $197 million dollars in U.S. Dollars. Tron’s stablecoin reserve group then bought1,249.57 BTC for an average of $29,394.
Tron’s Justin Sun ‘Still Believes in Algorithmic Stablecoins’
The USDD stablecoin currently has a market value of $272.36 Million and is in circulation for 271,438,207 USDD at the time. USDD saw $85.5 million of global trade volume in the last day and is currently 156th most valuable crypto asset.
Similar to the Terra blockchain’s mechanism of burning LUNA to produce UST, to mint a single USDD it costs $1 worth of tron to issue the crypto asset. It can be as big as the market will allow it to grow, and anyone can mint it in any way they want. Due to the turmoil in the markets caused by the UST De-pegging Event, crypto enthusiasts are wary of stablecoin assets that use algorithmic stability.
Despite the issues this past week, Tron founder Justin Sun talked to Coindesk’s Tracy Wang and he said that he is still optimistic about the algorithmic stablecoin model. “I still believe in algorithmic stablecoins,” Sun explained to Wang during a Zoom interview.
Do you have any thoughts about Tron’s USDD stablecoin initiative? What do you think about the TDR’s purchases this week? Please comment below to let us know your thoughts on this topic.
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