The past few weeks have been quite hectic to the crypto community with the whole crypto winter situation. Among them last week the TRON’s stablecoin USDD lost its dollar peg and it yet has to regain, sending its investors into a frenzy.
According to CoinMarketCap data, the USDD touched an all-time low of $0.9255 on June 19, before recovering to $0.9635 at the time of writing.
USDD is still a few cents short of $1, the price at which it’s supposed to be traded. But in a Twitter thread, the Tron DAO Reserve asserted that the USD is not depegged.
“No. USDD is a decentralized stablecoin that depends on an on-chain mechanism & collateralized assets, unlike centralized stablecoin e.x. USDC, which is attached to USD in a very close spread by banking mint and redemption,” the tweet reads.
Tron DAO Reserve says that volatility is unavoidable to some extent and the current market volatility rate is within +- 3%, which is a reasonable range.
Tron founder Justin Sun previously stated the de-pegging happened as a result of a high number of short sellers attacking TRX, the network’s native token on Binance.
As the USDD stablecoin began to depeg, TRX began to lose value. This is due to TRX holders’ anxieties, which have caused them to liquidate their holdings in order to avoid losses.
A few days back, Tron DAO Reserve withdrew 3 billion TRX tokens from Centralized exchanges as well as DeFi lending platforms to save USDD peg and prevent a situation like that of Terra’s UST.
Yesterday, Tron DAO Reserve announced it has purchased 10,000,000 USDD so as to “safeguard the overall blockchain industry and crypto market.”
Tron DAO Reserve revealed that it has a very healthy balance sheet right now and it assures the community that everything will be back to normal in a few days now that TRX’s funding rate has returned to normal and all positions have been handled.
In the case of TRX, it has been falling since reaching an all-time high price of $0.18 in April. At the time of writing it is trading at a price of $0.063.
