TRON Deploys Another $20M “to Safeguard the Crypto Market”
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TRON founder Justin Sun announced the update on Twitter today.
TRON DAO Reserve Drops $20M
TRON keeps adding to its reserves as the crypto bear market persists.
total 20 million for today! https://t.co/Hcaq58TZhg
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) July 8, 2022
The TRON DAO Reserve took to Twitter to post a new update Friday, saying it had bought $10 million worth of USDD and added $10 million worth of TRX to its reserves “to safeguard the overall blockchain industry and crypto market.” Justin Sun, the blockchain’s founder and de facto leader, also confirmed the update in a tweet seconds later.
USDD is TRON’s attempt at an algorithmic stablecoin. It takes inspiration from Terra’s UST, which suffered a dramatic collapse that caused an industry-wide wipeout when it lost its peg to the dollar in May. In theory, USDD shouldn’t suffer the same fate because it is collateralized by the TRON DAO Reserve. According to the organization’s website, the DAO holds $2.2 billion worth of collateral in TRX, BTC, USDT, and USDC and the total USDD supply is $723.3 million, making the stablecoin 316.2% overcollateralized.
The TRON DAO Reserve dropped $2 billion last month as it fought off short traders betting against TRX in a bid to preserve USDD’s dollar parity. USDD spent a week below peg trading as low as $0.93 but has since recovered to just under a dollar. The TRON DAO Reserve has added to its USDD and TRX holdings on several occasions since the depeg event.
While TRON has made clear efforts to gain traction this year with the launch of USDD, which it promised would give users “financial freedom,” that hasn’t been enough to save it from the brutal crash that’s caused losses across the market. According to CoinGecko data, TRX is currently trading just under $0.07, over 50% down from its 2021 high of $0.16. Worse still, TRX failed to reclaim its 2018 high over last year while other Layer 1 assets rallied. It rallied to $0.23 at the tail end of the 2017 bull run, meaning it’s currently about 70% short of its peak.
Disclosure: At the time of writing, the author of this piece owned USDT, ETH, and several other cryptocurrencies.