TRON USDD Stablecoin Dips to $0.97, Justin Sun Deploys Additional Capital to Maintain Peg
The value of the algorithmic stablecoin TRON USDD has fallen to $0.97, further eroding its dollar equivalency. This might possibly place undue strain on Curve’s USDD-paired DeFi networks. While preparing this article , USD constitutes roughly 82% of the USDD/3CRV pool holdings under the Curve Pool DeFi covenant, down from 88% before. The depeg hinders the crypto exchange of many other DeFi assets, such as DAI or USDC, for USDD.
Since dipping below it on October 16, USDD has had difficulty maintaining parity with the US dollar. On November 14, it skyrocketed to $1.04 before quickly falling down below. On the 12th of December, it dropped to a intra-day bottom of $0.97 before recovering to $0.98. Similarly, TRON’s TRX token is trading in the negative, with a daily price decrease of approximately 3.5%.
In reaction to the depeg, the cryptocurrency’s inventor, Justin Sun, declared the deployment of more resources to restore the parity. As per the URL provided by the creator, a wallet sent him nearly $1,000,000 worth of TUSD. Sun further said on Twitter that the USD is 200 percent overcollateralized by prominent cryptoassets.
The downfall of the Terra network a few months before was among the worst catastrophes the bitcoin sector has witnessed in recent history. Ever since, all major stablecoins, including Tether, have prioritized overcollateralization. Since the FTX outbreak, fears have arisen that some other algorithmic stablecoin catastrophe comparable to the Terra Luna disaster may occur.
Interestingly, TRON has had a $1 billion USDT influx in the past couple of weeks. The TRON blockchain network also approved the 79th Committee suggestion in December, which modifies two of the network’s settings. Additionally, TRON was at the top of the week’s top active networks.