Algorithmic stablecoin Tron USDD is losing its peg to the U.S. dollar. Cryptocurrency market participants are concerned that against the backdrop of cryptocurrency sales and market turmoil in the very near future, the Tron USDD stabelcoin may completely lose its peg to the U.S. dollar.
According to CoinMarketCap data, on the evening of June 14, stablecoin USDD is trading at $0.98. During the day, USDD fell to $0.97.
Token TRON (TRX) is also down 25% in the last 12 hours and is listed at $0.058 according to CoinGecko.
As with the failed Terra project, Tron initially offered USDD holders an annual “risk-free return” of 30%. This figure was later reduced to 10.9%. As with Terra and LUNA, USDD can be exchanged for TRX, Tron’s native network token. Similar are the statements of the leaders of both projects that the algorithmic support model for the stablecoin is provided with excess liquidity, which protects against the loss of the dollar peg.
Justin Sun, the founder of the Tron cryptocurrency project, tweeted on June 13 amid the sell-off of the TRX cryptocurrency on the Binance crypto exchange that the negative trend will not last more than 24 hours, and he will use the Tron DAO reserve in the amount of $ 2 billion to fight it.
On June 14, Justin Sun reported that the situation is gradually improving, and he sees no reason to panic, and even predicts “the possibility of obtaining a 2% profit.” Justin Sun has previously spoken out about the reasons for the collapse of the Terra project and its algorithmic stablecoin UST, promising to prevent a repeat of the situation in the case of his USDD.
After the algorithmic stablecoin UST Terra crashed, wiping out $60 billion in investor funds in a week, Sun changed the USDD operating model by adding collateral in the form of Bitcoin (BTC), TRX, USDT and USDC reserves. USDD is currently collateralized at 246.1% worth $1.77 billion.
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