Tron’s stablecoin USDD is shaping up to be one of the very first victims of the ongoing bloodbath in the cryptocurrency market since the stablecoin lost its dollar peg earlier in the week. It has been trading below one dollar since, hitting a record low of $0.958 around 3 a.m. eastern time. The Tron decentralized autonomous organization reserve has deployed more Tron tokens and USDC in a desperate attempt to save the stablecoin from the same fate as Terra’s USD.
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However, the stablecoin has yet to regain its value in US dollars. Tron’s USDD is a stable coin issued on the Tron blockchain platform like Terra’s now infamous USDT. The USDD is also an algorithmic stablecoin, with the decentralized autonomous organization behind it keeping track of collateralized to maintain the one dollar peg. As a press time, the reserves webpage shows a 317.25 collateralization ratio.
Despite the over-collateralization, the stablecoin has underperformed expectations since bitcoin fell 15 percent. It showed the first signs of weakness on Monday, going just slightly below the one dollar peg. It hit a record low of 0.974 dollars on Tuesday and fell even lower on Wednesday.
In response, the tron reserve said it was deploying more USDC and TRAX, the native tokens of the Tron protocol, to defend the peg. In a tweet on Tuesday, the organization said it received another 500 million USD to defend the USD peg.
In another tweet on Wednesday, it announced the deployment of 100 million USDC to safeguard the overall blockchain industry and crypto market.
The organization also said it would withdraw 2.5 billion TRX out of Binance to safeguard the overall blockchain industry and crypto market.
We all witnessed how brutal Terra’s implosion was to the overall blockchain industry and crypto market. According to reports, Three Arrows Capital, the Dubai based crypto fund now facing possible insolvency, lost over 500 million dollars during the terror implosion. According to a Wall Street Journal report, Three Arrows, popularly known as 3AC, was liquidated by crypto lemming firms and is currently in the process of repaying lenders and other counterparties. If another algorithmic stable coin goes belly up, especially with the current state of the crypto market and the global economic downturn, the recovery will be long and hard. Over the past 24 hours, there has been a lot of speculation about another stablecoin imploding on social media platforms, with many users comparing USDD to Terra’s UST.
However, supporters of the algorithmic stablecoin, Justin Sun, the founder of the blockchain protocol and the decentralized autonomous organization, are very optimistic about the USDD and Tron’s chances. On Wednesday, the organization quoted a tweet about crypto layoffs and happily declared that Tron is hiring. The original tweet shows a list of crypto-related firms laying off workers as economic uncertainties peak in the United States.
The USDD was trading at $0.975 per unit as of press time, down 0.15% from $0.63 in the previous 24 hours. TRX has lost over 20% in five days, but it is up by almost 13% today. What do you think about the USD and TRX? Is this going to be the next crypto project to nastily bite the dust?
[This article is a transcription of a video made by Savvy Finance]
Original video: https://youtu.be/bbUlw2NYTYk ]
