As USDD, Tron’s stablecoin, drops below $0.97, USDC is used to protect the $1 parity.

June 13, 2022

shutterstock 671335180


As USDD, Tron’s stablecoin drops below $0.97, USDC is used to protect the $1 parity.

Many people have been paying close attention to the Tron-based algorithmic stablecoin USDD since the aftermath of Terra UST and the recent volatility in the cryptocurrency market. On June 13, the cryptocurrency Tron (TRX) had a sharp decline in value, and Justin Sun, the inventor of Tron, discussed traders shorting the virtual currency. Sun claimed he didn’t believe the shorters could withstand a full day and indicated the Tron DAO Reserve will send $2 billion to “attack them.” Furthermore, during Monday’s chaos on the cryptocurrency market, the stablecoin USDD suffered a slight hit, falling to $0.977 per unit.

On one of the worst Mondays ever for crypto assets, the stablecoin USDD plunged to $0.97 per unit, prompting the Tron DAO Reserve to deploy resources to maintain the $1 parity. “Due to the challenging market environment, 700 million USDC have been transferred to the Tron DAO Reserve to safeguard the USDD peg. The company stated that the USDD collateralization rate is presently very close to 300 percent. Although it may not seem like a big deal to some investors, the USDD rose back to the $0.99 region after briefly falling to $0.97. However, the same thing happened to UST the day before the far larger de-peg. Additionally, Justin Sun said that $2 billion will balance out the claims that traders are unduly shorting Tron’s native asset, TRX.

The Tron DAO Reserve declared that the current USDC supply on TRON has reached $2.5 billion after adding 650 million USDC to the reserve. Sun believes that this tactic will boost investor trust in the stablecoin since, according to Tron, the USDD backing will be at least 130 percent overcollateralized. Sun said, “We want USDD to be overcollateralized, which I think would make market players more comfortable using us in the future,” to Bloomberg on June 5.

Read more: As reports of 3AC liquidations and insolvency circulate, Su Zhu makes a cryptic comment.

Exclusively hand curated news, written precisely in short by our editors for a 60 seconds read! We understand that reading multiple news from various resources could be monotonous, time consuming and less interesting. At Dcryptonews, you will experience a new style of reading news with smart keyword, ease of language that is easy to read for a quick news grasp.