Stablecoin USDD Loses $1 Peg, Tron Reserve Withdraws 989M TRX
- TRON DAO Reserve, a decentralized financial reserve for cryptocurrency, has withdrawn 989 million worth of TRX.
- USDD has lost its $1 peg and currently trades at $0.974
- People are afraid that USDD may follow the pattern of Terraform Lab’s stablecoin, UST.
TRON DAO Reserve (TDR), a decentralized financial reserve for cryptocurrency, has withdrawn 989 million worth of Tron (TRX) from Binance to an unknown wallet. At the time of writing, the transaction is equivalent to over $47 million.
This massive withdrawal was first confirmed by an automatic blockchain tracker system, Whale Alert, on June 15, 09:58:03 UTC, before TDR acknowledged it.
TDR claimed the withdrawal was to “safeguard the overall blockchain industry and crypto market.”
TRX, the native token of the Tron Foundation, is one of the collateral assets for USDD, the stablecoin of the Tron blockchain network. Following the crypto market carnage on Monday, USDD drifted a bit from its $1 peg. Currently, the price of USDD is $0.974.
There, however, are arguments that the USDD reserve is overcollateralized by at least 300%.
The 989 million TRX withdrawal out of Binance was to strengthen the USDD reserve further. Other collateral assets in the USDD reserve include Bitcoin (BTC), Tether USD (USDT), and Circle USD (USDC).
USDD first lost its one-dollar peg on Monday, June 13, when it tilted to $0.98. Then, Tron DAO Reserve deployed various resources to bring it back to $1. They first increased their USDC reserve by $650 million. And according to them, their current USDT reserve hit $2.5 billion.
The crypto community is concerned about USDD following the pattern of Terraform Lab’s stablecoin, UST. UST first saw a slight de-pegging a few days before it dive-bombed toward its current price of $0.00736.
USDD, like UST, is an algorithmic stablecoin with a supposed stable price and diverse use cases.