The Tron DAO Reserve announced it is withdrawing 3 billion TRX tokens from Centralized exchanges as well as Decentralized Finance (DeFi) lending platforms to save USDD peg and prevent a recurrence of Terra’s UST collapse.
Two days back, TRON’s algorithmic stablecoin USDD lost its dollar peg amid the current market crisis. Tron founder Justin Sun stated that the de-pegging happened as a result of a high number of short sellers attacking TRX tokens.
Tron’s native token TRX began to lose value as the stablecoin began to depeg. This is due to TRX holders’ fears causing them to liquidate their holdings in order to protect themselves from losses.
Tron began deploying TRX from the Tron DAO Reserve to protect TRX from being overshorted.
Initially, about $2 billion in TRX was deployed, and Tron has been steadily withdrawing more TRX since then, with the latest announcement of withdrawing 3B TRX.
However, the TRON DAO did not name the CeFi and DeFi platforms where the withdrawals will occur.
The TRX token is used to redeem USDD like LUNA for UST, and the move will prevent short-traders from tanking the price of TRX.
CEO Sun previously stated that TRON DAO will deploy $2 billion into Binance to combat short positions and protect the USDD peg.
In their latest tweet, TRON DAO Reserve stated that it will transfer another 100 million USDC on TRON to CeFi exchange to purchase TRX tokens.
Tron may continue its withdrawals if TRX token does not recover from its lows soon.
At the time of writing, USDD is trading at a price of $0.9824, and TRX token is trading at a price of $0.06.
