Alongwith the TVL of overall decentralized finance, decline in TVL of TRON defi is also becoming a concern for the crypto space
As per the decentralized finance (DeFi) data aggregator DefiLlama, the total value locked (TVL) in DeFi has fallen to $79.8 billion. Last time it was in April, 2021 when decentralized finance total value locked was around this level. This decline in total value locked (TVL) in decentralized finance space came in the wake of the ongoing crash that the market is going through.
Current decline in the TVL in overall DeFi space is due to instances when USDD algorithmic stablecoin of TRON network was seen losing its backing from US dollar on this Monday. Not just this, native token of TRON network, TRX has also lost about 8.35% in the last 24 hours while currently trading at $0.062.
Founder of TRON network, Justin Sun tweeted about betting of short sellers against the cryptocurrency and also said that the TRON DAO reserve has deployed about $2.5 billion in just a night in order to safeguard its stablecoin USDD pegging value to the US dollar.
Total value locked (TVL) of TRON Decentralized Finance reduced to just $4.53 billion that’s while at the same time overall TVL of defi space has dropped to its lowest level since April month of last year. Currently USDD is still trading at its price below $0.98 while at the time of writing.
The consistent losing of USDD’s peg value with US dollar is becoming a point of concern that it could result in the similar situation that happened with Terra network’s stablecoin UST’s collapse last month itself. UST algorithmic stablecoin of Terra network had also lost its peg value with fiat currency US dollar that resulted in its collapse eventually. The collapse resulted in a $40 billion worth Terra ecosystem consisting of LUNA token alongwith UST stablecoin down to the ashes.
USDD stablecoin is perhaps the news renowned debut in the crypto space from, which is an algorithmic stablecoin from Justin Sun’s TRON network. The stablecoin launched on 5th May, 2022 with intention of filling the void created by the fall of UST stablecoin that resulted in loss of huge value from the market. But given the ongoing market situations, the corners are obvious regarding the USDD stablecoin to face the similar situation where the developer team behind it is putting their full efforts to divert the potential chaos.
Source: https://www.thecoinrepublic.com/2022/06/14/what-made-defi-total-value-locked-reach-79-8-billion-lowest-since-april-2021/