Justin Sun Reveals $2B injection to save the USDD peg which means a short squeeze might be incoming so let’s read more today in our latest Tron news.
Justin Sun reveals $2B injeciton to save the USDD peg and said that Tron will deploy the funds to protect the TRX from the funding rate shorting it on Binance. Sun also said that the Tron DAO will be deploying $2 billion to fight the short positions on Binance because of the funding rate and this funding rate of shorting TRX on Binance is negative 500%. Tron Dao will also deploy 2 billion USD to fight them. To those that are not aware, he revealed that the Tron DAO reserve saw injections of 800 million USDC to defend the USDD peg.
To those unaware, USDD is an algorithmic stablecoin that works by burning TRX and keeps the dollar parity.
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However, to avoid a UST-LUNA scenario, USDD took an approach of over-collatralizing USDD at a 1to 3 scale by acquiring various assets like TRX, BTC and USDC, TUSDT, and USDT stablecoins. This means that 1 USDD should be worth $1.3 according to the team. In the meantime, the official website shows that the collateralization ratio of USDD which shows the stability and the security of the stablecoin, is now at 280%.
USDD’s peg came under attack over the past few hours as the entire market went into pieces. The USD stablecoin value dropped to $0.98 as per the data From CoinMarketCap.
Created as an algorithmic stablecoin, Justin Sun’s Terra USDD stablecoin is now shifting gears towards a hybrid model with improved transparency. Justin Sun’s stablecoin is over-collateralized with a collateral ratio of 226% as per the data from Tron’s DAO with the organization responsible for maintaining the collateral of USDD. The team behind USDD promised a minimum collateral ratio of 130% which is higher than the 120% collateral ratio maintained by the DAI Stablecoin. The collateral backing USDD includes 14,040 BTC, 240 million USDT, and about 1.9 billion Tron as the native token of the ecosystem.
Tron is a cryptocurrency led by Justin Sun launched in 2018 and now, Tron is the third-biggest blockchain in terms of total value locked. As per DeFi Llama, the total value locked on Tron’s 9 nine different apps stands at $5.9 billion or up by 44% over the past month. The only two chains ahead are BNB chain and the industry leader Ethereum so Binance Smart Chian’s TVL stands at $10.8 billion and ETH hosts over $93 billion.
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