Justin Sun defends USDD from Terra-like collapse, deploys capital to re-establish $1 peg
- Justin Sun deployed upwards of $200,000 to defend Tron ecosystem’s stablecoin USDD’s peg.
- USDD lost its $1 peg and price dipped to the $0.97 level, sparking fears of another Terra-like stablecoin collapse.
- USDD’s inability to maintain its lost peg has led experts on crypto Twitter to speculate the stablecoin could collapse.
Terra ecosystem’s stablecoin USDD lost its $1 peg and has slipped to the $0.97 level. Justin Sun has alleviated fears of users in the Tron ecosystem and informed them that he is deploying more capital to re-establish USDD’s $1 peg.
Justin Sun tackles crypto Twitter FUD, deploys more capital to defend USDD peg
Justin Sun, the founder of Tron alleviated concerns of users in the ecosystem, assuring them that more capital is being deployed to re-establish USDD’s peg. USDD is Tron ecosystem’s stablecoin that is pegged 1:1 with the US Dollar.
USDD recently lost its peg and plummeted to $0.97. This raised concerns among traders on crypto Twitter. When the FTX exchange collapsed, USDD temporarily lost its peg for a few hours. Justin Sun deployed capital to re-establish its $1 parity.
USDD price chart
On-chain data reveals Justin Sun moved funds off Binance
Based on on-chain data, Justin Sun withdrew 33,911,530 BUSD and 15,432,715 USDT. Sun transferred 33,911,530 BUSD to the Paxos Treasury. After exchanging 15,432,715 USDT for 15,434,455 USDC and transferred to Circle.
Justin Sun deploys capital to re-establish USDD peg
Sun told Tron ecosystem that he deposited $100 million to Binance. Meanwhile, Changpeng Zhao, the CEO of Binance, commenting on Sun’s tweet, said it is a part of a cross-chain swap and that he was deploying Binance’s stablecoin BUSD on Tron.
This is part of deploying BUSD on TRON, I think. Cross-chain swaps. Not sure of the details. Not directly handling it myself. https://t.co/DF32yAFxpI
— CZ Binance (@cz_binance) December 13, 2022
At press time, USDD is trading at $0.97 and the stablecoin’s inability to re-establish its peg has resulted in speculations whether the stablecoin will collapse like Terra’s algorithmic stablecoin UST.
The Tron founder assured users in the ecosystem that USDD is over collateralized.
In case anyone ask about #USDD, it is 200% collateralized ratio on https://t.co/bQwdLAEw0B. You can check all live data on blockchain 24*7. pic.twitter.com/whbJrKpMoh
— H.E. Justin Sun (@justinsuntron) December 12, 2022
Algorithmic stablecoin USDN loses its peg
Neutrino USD (USDN), an algorithmic crypto-collateralized stablecoin pegged to the US Dollar lost its peg. USDN plummeted 23.7% overnight, losing its $1 parity, exchanging hands at $0.60 during press time.
Crypto Twitter is rife with speculation and fear, uncertainty and doubt (FUD) around depegging of stablecoins and its aftermath. All of USDN’s operations, such as issuance, collateralization, staking, and reward payouts, are transparent and governed by a smart contract. Despite its transparency, the stablecoin hit an all-time low of $0.55, on December 13.
So far contagion from the rumors appears to be limited, with lead crypto and market bellwether Bitcoin price continuing to range trade in the $1,7200s, little changed from the previous week.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
