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Tron Falls Sharply As Sun Scrambles To Save Stablecoin

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Tron Falls Sharply As Sun Scrambles To Save Stablecoin

Tron price momentum faded over the weekend, and the price has dropped by more than 40% since then. The cryptocurrency is presently having difficulty gaining traction.

Tron Falls AS USDD  Depegs

TRX has dropped 19% and is now trading at $0.05, its lowest level in 15 months. In the last 24 hours, the token has also been the worst performer among the top 50 cryptocurrencies.

The token’s weakness follows the loss of the USDD algorithmic stablecoin’s dollar peg, despite founder Justin Sun’s repeated efforts to keep the peg.

In the last 24 hours, the token’s entire market valuation has dropped by nearly 1% to $701.4 million. The token has garnered comparisons to Terra’s UST stablecoin, which vanished in May due to its algorithmic nature.

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USDD/USDT breaks dollar peg. Source: TradingView

Fear began as soon as the USDD’s 1:1 peg to the dollar was lost. TRX hasn’t been able to reverse the downward trend since then, plummeting by more than 40% in less than a week. TRX may face tremendous sell pressure to close the gap as long as USDD is below one dollar.

TRX has found support at the $0.05 level, from which it has bounced higher. TRX’s resistance is at $0.057, and given the current fundamentals, it doesn’t appear likely that the trend will shift.

Related reading | TRON Has a Record-Setting Month

Justin Sun Scrambles To Save USDD

However, Tron, like Terra, is putting billions of dollars behind the coin. Because USDD is not as large as UST, which was worth roughly $20 billion at its peak, crypto specialists think that it will not suffer the same fate.

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USDD had recently been changed by Tron’s Sun to strengthen collateralization and make it less vulnerable to a crash like Terra.

This week, Tron spent over $700 million on the open market to sustain the USDD peg. Justin Sun also stated that a $2.5 billion fund would be set up to help TRX.

Tron has purchased TRX on multiple occasions to support the token, most notably withdrawing $948 million ($47 million) from Binance. The Tron DAO has made a number of withdrawals from Binance and has also used its USDC assets to purchase more tokens.

Tron has also announced a mining pool with Curve Finance and Convex Finance, which is intended to attract yield-hungry traders with an estimated APR of 96.25%.

Despite Justin Suns’ assertions that the USDD is unduly collateralized, the market does not appear to agree. The trend for TRX is likely to be negative as long as this continues, and the next significant support is identified at $0.040.

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Related reading | Why TRON Has Seen a 45% Hike in Total Value Locked (TVL)

Featured image from Pixabay, chart from TradingView.com

Abracadabra

USDD Continues To Trade For Under $1 — Tron DAO Reserve Insists Stablecoin Has Not Depegged

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USDD Continues To Trade For Under $1 —  Tron DAO Reserve Insists Stablecoin Has Not Depegged

Since June 12, 2022, the Tron-based stablecoin USDD has remained below a U.S. dollar in value. On Monday, USDD had a 24-hour trading range of around $0.943 to $0.966 per unit and the day prior on June 19, USDD saw an all-time low at $0.928 per unit. Despite being below the U.S. dollar parity, the Tron DAO Reserve says the stablecoin has not depegged in a Twitter thread that discusses a combination of an “on-chain mechanism [and] collateralized assets.”

USDD Trades Below $1 for an Entire Week

USDD has been trading for lower than a U.S. dollar for over a week and on Sunday, USDD tapped an all-time low at $0.928 per unit. The following day on Monday, the stablecoin has been exchanging hands for $0.966 at the time of writing, and it saw a 24-hour low at $0.943. USDD is the ninth-largest stablecoin by market capitalization, with approximately $696.28 million on Monday evening at 7:00 p.m. (ET). The stablecoin has seen roughly $83 million in global trade volume and the top USDD exchanges on Monday include Kucoin, Huobi Global, Poloniex, and Pancakeswap version two (V2).

To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve have purchased 10,000,000 #USDD on #TRON.

— TRON DAO Reserve (@trondaoreserve) June 20, 2022

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The Tron DAO Reserve account on Twitter has been announcing numerous crypto asset purchases to safeguard the crypto ecosystem. On Monday, the Tron DAO Reserve revealed it added ten million USDC to “safeguard the overall blockchain industry and crypto market.” The Tron DAO Reserve web portal indicates that the stablecoin is overcollateralized by 324.35% at the time of writing at 7:20 p.m. (ET). At that time, the website shows there is 1.080 billion USDC in the reserve, 140,013,886 tether (USDT), 14,040.6 bitcoin (BTC), and 10,874,566,176 tron (TRX).

While the stablecoin has been trading for under $1 per unit, the Tron DAO Reserve’s official Twitter account says that the USDD crypto asset has not depegged. “Is USDD depegged?” the Twitter account recently asked. “No. USDD is a decentralized stablecoin that depends on an on-chain mechanism & collateralized assets, unlike centralized stablecoin e.x. USDC, which is attached to USD in a very close spread by banking mint and redemption.” Tron DAO Reserve said that a certain percentage of volatility is “unavoidable.” The USDD treasury organization added:

Currently, the market volatility rate is within +- 3%, an acceptable range. We will watch the market very closely and act accordingly.

Tron DAO Reserve Says USDD Ecosystem Aims to Focus on Collaborations and Multichain Expansion

The Tron DAO Reserve also discussed “massive short positions” that were betting against tron (TRX), the blockchain’s native crypto asset. USDD is not the only stablecoin in the crypto industry that has suffered from a certain percentage of volatility. The decentralized finance (defi) protocol Abracadabra’s stablecoin MIM briefly slid to $0.91 when bitcoin (BTC) slipped to $17,600 per unit two days ago. Since then, Abracadabra’s magic internet money (MIM) has jumped back to the $0.99 range.

Furthermore, the stablecoin neutrino usd (USDN) has been volatile during the market carnage this past week. USDN is a stablecoin crafted by the Waves (WAVES) protocol in a smart contract and minting USDN involves collateralizing WAVES. Like MIM, USDN has managed to come back to the $0.99 range.

As far as USDD is concerned, the Tron DAO Reserve doesn’t seem to be sweating being below the $1 parity. Tron DAO Reserve noted in the recent Twitter thread that it aims to be the top dog of decentralized stablecoins. “We will focus on collaborations with different cefi/defi platforms and multichain expansion. We aim to offer the best decentralized stablecoin ever available in the market,” the Tron DAO Reserve’s Twitter thread concludes.

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Abracadabra, Cefi, collateral, DeFi, Dollar-Pegged, justin sun, Magic Internet Money, MIM, multichain, neutrino usd, overcollateralized, Stablecoin, Tron (TRX), Tron Blockchain, TRON DAO Reserve, trx, TVL, U.S. dollar, USDC, USDD, USDD ecosystem, USDD Stablecoin, USDN, USDT, WAVES

What do you think about the USDD market this past week? Do you agree with the Tron DAO Reserve’s explanation? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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How Tron [TRX] is managing to keep its boat afloat amid looming depegging fears

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How Tron [TRX] is managing to keep its boat afloat amid looming depegging fears

We’re entering the fifth day of the Ton’s DAO crisis. While Justin Sun and his team have been trying to peg back USDD to $1, TRX itself has dropped by double digits during the course of the week despite some bullishness recently.

Unfortunate!

The USDD de-pegged from the US dollar at the start of the week by around 0.3 cents. This caused a lot of panic among investors fearing a Terra-like collapse. In the bleak market conditions, it was enough to wreak havoc on the entire digital asset market. All major cryptocurrencies are down along with liquidations of Celsius and Three Arrows Capital.

In an attempt to keep the ship afloat, Justin Sun and the Tron DAO team opted for market intervention. They decided to pour liquidity out of reserve funds and buy freely available TRX on those exchanges. Between 15-16 June alone, around 5 billion TRX tokens were withdrawn from centralized exchanges and DeFi lending platforms. Today, the Tron DAO Reserve transferred another 100 million USDC tokens to exchanges and repeat the process.

To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will withdraw 2.5 billion #TRX out of binance.

— TRON DAO Reserve (@trondaoreserve) June 15, 2022

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In the latest tweet, Tron DAO Reserve confirmed that they received another 300 million USDC as reserve funds. This pumped up the USDD collateralization to above 300% ensuring the safety of the network.

Miles to go still

Despite the efforts of Justin Sun and his team, TRX and USDD are still struggling. The latest crypto crash has been a big blow, but TRX has started showing some signs of recovery. Yesterday the native coin pumped up by 27% before a brief sell-off. Currently trading at $0.059, TRX is down by about 25% this past week. The volume on the network has also suffered in the past 24 hours dipping by 50%. The RSI for TRX currently stands at 39.8 signaling a period of consolidation in the coming days.

Source: Trading View

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Kanav is a journalist at AMBCrypto. He has a Masters in Media and International Conflict and is interested in areas of digital society, crypto developments in the political sphere and the socio-cultural impact of a crypto-society.

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Tron’s USDD Remains Below The $1 Parity For 24 Hours, Token Hits A Low At $0.95 Per Unit

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Tron’s USDD Remains Below The $1 Parity For 24 Hours, Token Hits A Low At $0.95 Per Unit

Tron’s stablecoin USDD has remained below the $1 parity for well over 24 hours and around 3:00 a.m. (ET), USDD hit a low of $0.958 per unit. The Tron DAO Reserve has deployed more tron tokens and USDC to defend the peg and the DAO’s reserve web page shows the coin is overcollaterized by 314% at the time of writing.

Tron’s USDD Has Been Unable to Surpass $0.98 During the Past 24 Hours

The stablecoin USDD, issued on the Tron blockchain, is an algorithmic stablecoin that also leverages overcollateralization to hold a $1 peg. However, USDD has not been able to keep the $1 parity over the last 24 hours, and the price has wobbled during the last 72 hours. On Monday, USDD showed signs of weakness, slipping just below the $1 parity, and then on Tuesday, the value of USDD hit a low of $0.974 per unit.

On Wednesday, the Tron DAO Reserve deployed more USDC and TRX to help defend the peg. “To safeguard the overall blockchain industry and crypto market, Tron DAO Reserve has transferred 100 million USDC on Tron to Binance to purchase TRX,” the organization tweeted. Not too long after that tweet, the Tron DAO Reserve wrote: “To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will withdraw 2.5 billion TRX out of Binance.

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Tron Founder Tells DAO Reserve to ‘Keep Withdrawing,’ While Supporters Claim It’s Not Fair to Compare USDD With UST

As the Tron DAO Reserve withdrew more assets to add to the collateral, Tron’s founder Justin Sun wrote: “Keep withdrawing,” like a captain at the helm. Speculation and concerns about USDD are swirling constantly on forums and social media and the tokens celsius network (CEL) and Tron’s USDD are the most searched coins on coingecko.com during the last 24 hours. Throughout the thick of it, speculation concerning USDD collapsing and comparing USDD to terrausd (UST) is some of the most prominent conversation.

However, some USDD supporters believe the discussions and speculation surrounding Tron’s stablecoin stem from fear, uncertainty, and doubt (FUD) tactics. “There’s so much FUD about Tron [and] USDD as people compare them to LUNA [and] UST,” the Twitter account Thanx Finance wrote on Wednesday. “Wake up, it’s not gonna collapse, just check the stats and buy the dip. 300% + total collateral ratio. 700 [million] USDD supply [is less than the] 4.5B TRX [market capitalization],” the Tron supporter added.

At the time of writing, USDD is swapping for $0.974 per unit, but it has not been able to surpass $0.987 during the past 24 hours.

Tags in this story

collateral, justin sun, overcollateralized, Stablecoin, Terra Blockchain, Tron (TRX), TRON DAO Reserve, trx, TVL, USDC, USDC supply, USDD, USDD Stablecoin, USDT

What do you think about Tron’s USDD falling to $0.95 on Wednesday? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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