Bis repeat? – While the Bitcoin (BTC) and cryptocurrency market is experiencing a new decline phasethe whole cryptosphere remembers the terrible crash of the Terra UST (LUNA). The recent loss of indexing stablecoin USDD of tron on the US dollar therefore worries crypto-investors all the more.
A new stablecoin in turmoil?
L’USDD blockchain tron (TRX) is a algorithmic stablecoin, i.e. without guarantee reserves directly in US dollars. He is entered into service at the beginning of May 2022just a few days away from the gigantic collapse of the TerraUSD (UST)- which was also an algorithmic stablecoin.
The recent bad news in the crypto market – in particular the blocking withdrawals on the Celsius lending service – and the general fall in prices threatens the USDD to experience a similar fate at the UST.
Indeed, since this Monday, June 13, the USD has started to lose parity with the US dollar. Even going so far as to descend briefly to $0.977 this Tuesday, June 14. As of this writing, USDD is trading at exactly $0.981.
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Tron Founder Slams Attack on USDD
As Decrypt notably reports, Justin Sunco-founder of Tron, denounces as source of this loss of USDD peg to the dollar: a large number of short sales (positions shorts) against the TRX token on the crypto-exchange of Binance.
The decentralized autonomous organization (DAO) in charge of maintaining this parity – called Tron DAO Reserve – would however be on deck and on the alert to straighten the bar. This DAO would then be ready to inject up to $2 billion if necessary, according to Justin Sun.
“The funding rate for short sell positions against TRX on Binance is 500% negative. The Tron DAO Reserve will deploy up to $2 billion to combat them [si nécessaire]. I don’t think they can last even 24 hours. A squeeze shorts [ndlr : liquidation des positions vendeuses] is to come. »
And indeed, again on June 14, the Tron DAO Reserve injected $500 million moreover, in the form of the stablecoin USDC, to maintain a large collateral reserve for the USDD. It had already injected 650 million USDC yesterday, June 13.
“To combat the current extreme market conditions, the Tron DAO Reserve received an additional 500 million USDC to defend the USDD peg [sur le dollar]. The USDD collateralization rate is now 310%. »
So far, the situation seems relatively under control, although the slight parity loss of the USDD against the dollar has not yet been made up. Either way, let’s hope Tron’s stablecoin doesn’t experience the same dramatic mishap as Terra’s UST, because it had led to the inexorable fall towards 0 of the LUNA token.
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