As traders race to make a bet that the cryptocurrency will fall further, the price of shorting the native token of the Tron blockchain, which is denoted by TRX, rose as high as 500 percent yearly on the cryptocurrency exchange Binance today. On Monday, the creator of Tron, Justin Sun, took to Twitter to deliver the news that there had been a significant increase in the referenced funding cost for the TRX perpetual (continuous) futures contract that is traded on Binance.
The controversial cryptocurrency entrepreneur, who backed Tron earlier, but is now employed by Grenada as a diplomat, recently stated that he does not believe that this degree of short interest can be maintained for even one day. “There will soon be a short squeeze,” Sun further stated.
According to statistics provided by CoinGlass, while preparing this report, the financing rate decreased by a little bit. Binance is currently charging 0.4272 percent each 8-hour period to those traders who are short TRX perpetual contracts. The rate works out to be 468 percent when it’s expressed on an annual basis. The significant interest in shorting TRX has come as the price of TRX, which was trading at USD $0.06348 as of Monday at 11:30 UTC, has already dropped by 17 percent over the course of the previous 24 hours and 23 percent over the course of the previous 7 days.
Soon after that, Sun shared once again on Twitter the information that the TRON DAO Reserve had deposited USDC 100 million on the cryptocurrency market Binance in order to acquire TRX. In the meantime, it would seem that there has been some pressure put on the USDD peg, which is the new stablecoin that was introduced not too long ago by Sun. According to data provided by CoinGecko, trading in USDD was taking place at 0.990 as of 11:30 UTC, having previously reached a low of 0.983 earlier in the day.
Funding rate of shorting #TRX on @binance is negative 500% APR. @trondaoreserve will deploy 2 billion USD to fight them. I don’t think they can last for even 24 hours. Short squeeze is coming. pic.twitter.com/VRExM6UK70
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 13, 2022
Sun stated in his post that “Well done!” after announcing that “700 million USDC has been put into TRON DAO Reserve for USDD peg.”
After Sun disclosed intentions for USDD, an algorithmic stablecoin with characteristics to the now-defunct terraUSD, there has been a fresh emphasis on Tron and the TRX currency (UST). The stablecoin was touted as “the most decentralized stablecoin in the history of humanity,” and it was believed to pay holders yearly returns of 30 percent for staking it. This was greater than the commonly promised rate of 20 percent for UST.
Doing our part. https://t.co/ykZj4R3pVE
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 13, 2022
Nevertheless, since the failure of UST, Sun has been making an effort to put some space between his own venture and Terra’s stablecoin. He stated, among many other things, that the USDD will be backed by a minimum of 130 percent, which would be made up of a variety of cryptocurrencies and rest of the stablecoins.
