TRON still believes in stablecoins as it continues to pool TRX, Bitcoin and Tether to protect USDD

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2022-05-18 20:55:26

The first two weeks of May throughout the crypto market witnessed the collapse of the Terra ecosystem with the Luna token and the UST stablecoin. Despite that, Tron DAO Reserve (TDR) continues to buy large quantities of digital assets to reinforce the guaranteed value of stablecoin USDD.

USDD price chart last 24 hours on Coinmarketcap

On May 7, TDR purchased more than 504 million TRX tokens with a total value of $39 million. Since then, the project has continued to buy other cryptocurrencies such as USDT and BTC. The purpose of this action is to increase the amount of assets in the USDD guarantee reserve. This is TRON’s underlying algorithmic stablecoin, which is pegged to the dollar and shares many similarities with Terra’s UST.

Over the past week, May 10 TDR continues to buy another 500 BTC ($15.5 million) and nearly 600 million TRX tokens ($45.6 million) despite the “bloody week” event. ” by UST. The next day, the fund again announced to buy another 1,000 BTC worth $30 million and 1.4 billion TRX tokens worth $97 million. This can also be explained as an action to protect USDD to keep its value stable before the storm that is ravaging the stablecoin sector.

Not stopping there, TDR continued to buy another 200 million USDT at the price of $0.985, equivalent to about $197 million on May 12. At the same time 1,249.57 BTC was also added to the reserve on the same day.

TDR emphasized that the purpose of the move is to “protect the market and the blockchain industry as a whole, prevent panic trading caused by the financial crisis, and mitigate the impact of a long economic downturn.” limited and serious”.

See also: In contrast to the market, TRX rebounded strongly last week

At the moment, the total supply of USDD stands at 286,513,774 and there are 286,049,207 USDD in circulation. In the last 24 hours, USDD trading volume has reached $198.8 million and is currently ranked 158th in terms of market capitalization.

Similar to the Terra blockchain’s LUNA burning mechanism to generate UST, the buyer needs to spend $1 TRX to mint a single USDD. With the market turmoil that has taken place due to the UST’s loss of peg, it can be said that the crypto community is being very careful with algorithmic stablecoins.

Despite the problems of the past week, TRON founder Justin Sun says he remains optimistic about the algorithmic stablecoin model.

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