Tron launched the USDD algorithmic stablecoin last month in the wake of TerraUSD’s collapse to avoid the same problems with its own currency. The entire supply of USDD is $668 million, according to CMC statistics. According to the TDR website, the collateralization ratio was 218% as of Monday. Despite this, the company declared on Sunday that a minimum of 130% will be maintained. TDR’s homepage indicates $787 million in Bitcoin, Tether, and Tron’s TRX reserves to back up the USD.
The total value of these assets is roughly $1.4 billion. The Luna and TerraUSD ecosystems collapsed a few weeks ago, wiping up a market worth more than $60 billion. This is followed by these moves. Justin Sun, the creator of the TRON ecosystem, has endorsed the USDD stablecoin’s over-collateralization.
On June 6, Justin Sun tweeted:
“This has been in the plan, but Terra/Luna definitely accelerated and prioritized this for our team… We want to have #USDD to be #overcollateralized, which I think will make market participants more comfortable about using us in the future.”
The history of algorithmic stablecoins, which aim to maintain a set price, usually $1, is volatile. When the value of the stabilising token declined, efforts like Neutrino and Basis had their dollar pegs removed, some dramatically.
The USDD stablecoin has been the primary driver of TRON’s pricing since its creation. The fall of Luna and TerraUSD worsened the cryptocurrency market’s woes as the Federal Reserve raised interest rates and inflation continued to rise. The two most popular cryptocurrencies, Bitcoin and Ether, are down more than half from their November highs, and many other digital assets are down much more.
The USDD wants to raise $10 billion via TDR to preserve its peg as a result of the Terra/Luna crisis, according to Sun in an interview earlier this month.
