A large sum of USDT was sent from an unidentified address to the Binance exchange. As the news spread, everyone panicked, trying to figure out who was behind the operation.
Whale Alert, an expert blockchain tracking service, recently announced the transaction of 100,000,000 USDT from an unidentified wallet to Binance in one of tweets.
Reason For Such A Huge USDT Transaction
The transaction amount will support as security to support Tron’s new USDD stablecoin. Justin Sun proposal says that $100 million will be spent on BTC and TRX. The amount will be made use in the same way as Luna and BTC are used in UST.
To manage the price of the USDD algorithmic stablecoin, the method demands the sale and purchase of volatile assets. USDD presents a greater return to anyone willing to allow liquidity for the stablecoin that will attract additional purchase activity from investors and traders.
Just after the Terra incident, Sun received backlash from investors across the cryptocurrency community. Because after this incident, Sun said USDD will gain support from risky assets in the same way that UST is.
The basic issue mostly with the BTC and TRX backup model is that a digital asset might shed close to 50% of its worth in a matter of days. USDD should have a minimal value that is absorbed by the security behind it in order to preserve the stability and keep the USD peg.
USDD’s valuation stands at $702 million at the time of reporting, which the Tron Reserve DAO will easily handle. To prevent Terra’s UST and LUNA, TRON Foundation will have to raise the security backing. This will happen if the capitalization surpasses $5 billion.
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Source: https://coinpedia.org/news/here-is-why-justin-sun-moved-100000000-usdt-to-binance/