Justin Sun Pouring More Fundings to Keep USDD Stable

Justin Sun tweeted on Monday morning to say that he had traded USDD, the native stablecoin of Tron, for over $773,000 worth of other currency.

The founder of Tron tweeted, “Deploying more capital—steady lads,” imitating Terraform Labs CEO Do Kwon’s message from immediately before Terra’s collapse in May.

Data on transactions by Sun revealed that he exchanged more than $203,000 in USDC and $570,000 in USDT for the USDD stablecoin.

Since the end of October, the stablecoin, which is usually indexed to the value of the dollar, has fallen below $1. However, today saw the token reach an all-time low of $0.97.

Following Sun’s significant trade, USD is now at $0.98.

With a market valuation of $711 million, the stablecoin is now the eighth-largest stablecoin.

But this is a far cry from the market leaders Tether (USDT) and USD Coin (USDC). Tether, the biggest of the bunch, is worth more than $65.7 billion on the market.

Originally intended to replicate Terra’s UST’s mint-and-burn architecture, Tron’s decentralised stablecoin USDD was modified following Terra’s failure when USD lost its dollar peg.

Members of the Tron DAO Reserve who have been added to the whitelist can now burn native TRX tokens to create more USDD stablecoins. Similar mechanisms were employed by UST, which allowed users to generate more UST by consuming the network’s native LUNA token.

Tron claims that USDD is currently overcollateralized, with support from Bitcoin, USD Coin, TRX, and other “highly liquid” tokens. This claim is made in the project’s white paper.

The number of tokens backing the stablecoin, according to USDD, is also 200% overcollateralized.

Nevertheless, considering the stablecoin’s protracted period of depegging, which includes today’s new low, this hybrid strategy doesn’t seem to be encouraging much trust in investors.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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