Tron’s USDD Slips Under $0.97, Justin Sun Is “Deploying More Capital” To Defend Peg | Bitcoinist.com

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Tron’s USDD stablecoin fell below $0.97 today, and founder Justin Sun has tried to reassure users by saying that he is “deploying more capital” to defend the peg.

Tron’s USDD Stablecoin Depegs To Lowest Value Since June 2022

Tron’s Decentralized USD (USDD), which had already been struggling with its peg this last month as it stayed below $1, has observed further destabilization today as it touched lows not seen since June.

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Below is a chart that shows the trend in the stablecoin’s price (against USD) over the last 24 hours:

Looks like the price of the coin has jumped back up following the decline | Source: USDDUSD on TradingView

As the above graph shows, USDD declined to as low as below $0.97 earlier in the day, but has since seen some recovery to around $0.977.

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Justin Sun, the founder of TRON, has come forth and tried to reassure users by pointing out that the stablecoin is secured by a collateral ratio of more than 200%.

Additionally, Sun also informed users that he is “deploying more capital” to defend the peg.

Before the Tron founder added these extra deposits, the collateral ratio of the stablecoin was around 200.71%. Now, the crypto has become even further overcollateralized as the ratio has improved to 200.88%.

The overcollateralization of the decentralized USD stablecoin | Source: USDD.io

While USDD seems to have stopped from further depegging for now, it’s still unclear whether the coin will be able to regain $1 anytime soon.

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Since the collapse of the crypto exchange FTX, the stablecoin hasn’t been able to stabilize its peg. Other stables also saw turbulence from the crash, but the depegging was only temporary in their case, as they were back up quickly enough.

Decentralized USD is a stablecoin issued by the TRON DAO reserve, and is collateralized by the organization using multiple assets like Bitcoin, Tron, and USDT.

The crypto’s model is similar to Terra USD (UST), a stablecoin that lost its peg and collapsed back in May of this year (an event that would kick off a market-wide crash).

After USDD slipped further away from its $1 peg today, there have been speculations in the crypto community on whether the stablecoin is heading towards a similar fate to UST.

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If USDD does indeed end up following the path of UST, the domino effect on the market from its collapse is unlikely to be on the same level as Terra USD’s, given that the market cap of USDD is currently nowhere near what UST was just before it went down.

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Author: Hououin Kyouma


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