• TRON’s stablecoin USDD recently lost its peg with the USD amidst marketwide fears of a crash. 
  • Justin Sun informed the community that TRON DAO reserve will deploy $2 billion to re-establish USDD’s peg. 
  • Terra whistleblower FatMan identifies a pricing bug that shows USDD as completely collateralized, 100%, despite the decline in TRON price. 

TRON’s decentralized stablecoin USDD lost its peg by nearly 1%. Justin Sun has assured the community that the TRON DAO reserve will protect USDD from a de-peg. 

TRON’s USDD could face a similar fate as Terra’s LUNA

TRON’s decentralized stablecoin made headlines over the past two weeks for the over-collateralization of USDD. The stablecoin, however, suffered a de-peg today, slipping nearly 1% from its peg of $1. 

After Terra’s LUNA collapse, Justin Sun, the founder of TRON, informed the community that a planned move had been accelerated, and the decentralized stablecoin USDD was modified to avoid a similar fate as Terraform Lab’s UST. 

Sun assured users that the TRON DAO Reserve would be very active in the market. The algorithmic stablecoin made its debut in May 2022 and decided to boost transparency and add collateral to safeguard against a crash. 

The estimated circulating supply of USDD is $723.3 million, as indicated by CoinGecko and usdd.io. The collateralization ratio is indicated as 278.58% as of June 13, 2022. TRON started on June 12, 2022, guaranteeing a minimum collateral ratio of 130%. 

The collateral ratio is the ratio between the collateral and the issued stablecoin. However, crypto Twitter and experts believe this is a bug. 

USDD reserves and collateral ratio details from usdd.io

USDD reserves and collateral ratio details from usdd.io

A member of Proximity Labs, a global team of coders and experts, has said the USDD collateral ratio is incorrect. Interestingly, FatMan, a whistleblower from the Terra community who has investigated the collateral ratio, asked his followers if the USDD burnt (locked) collateral was hard coded to display a fully backed USDD supply despite the TRX price falling?

The whistleblower argues that it could be an intentional design instead of a bug since the “burnt” collateral is worth exactly the same as the USDD supply. 

Justin Sun assured USDD peg will be maintained 

After USDD’s de-peg, Justin Sun, founder of Tron, assured the community that the TRON DAO Reserve would deploy funds to protect TRX from the funding rate of the asset being shorted on Binance. 

TRON DAO will therefore deploy $2 billion, to fight short positions on Binance and fight a negative 500% APR. Sun told followers that a short squeeze was coming. The DAO’s reserve has seen an injection of 800 million USDC to defend the peg of the decentralized stablecoin USDD. 

$800 million USDC has been deployed to Binance by TRON DAO reserve at the time of writing. 

Analysts identify weekly top losers 

FXStreet analysts have evaluated the top cryptocurrencies to identify losers from the past week. These cryptocurrencies could witness further price decline. For more information, watch this video:

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin consolidates ahead of MicroStrategy Q1 earnings, strategic Bitcoin reserve deadline

Bitcoin consolidates ahead of MicroStrategy Q1 earnings, strategic Bitcoin reserve deadline

Bitcoin price is extending its consolidation streak, trading around $95,000 on Wednesday, as traders await a decisive breakout. MicroStrategy’s Q1 earnings release and the approaching deadline for the Strategic Bitcoin Reserve have the potential to move BTC price.

Chainlink price offers mixed signals as supply outside of exchanges soars but network activity declines

Chainlink price offers mixed signals as supply outside of exchanges soars but network activity declines

Chainlink's supply outside exchanges has surged to 803.38 million from 778.87 million in under two months. LINK network activity declines, with new and active addresses falling from a recent peak.

Ripple Price Prediction: XRP price uptrend toward $3 looks steady

Ripple Price Prediction: XRP price uptrend toward $3 looks steady

Ripple (XRP) price hovers at $2.24 at the time of writing on Wednesday as bulls try to prevent the pullback from its April peak of $2.36 from extending further. If XRP holds above the immediate support at $2.21, a reversal could soon ensue.

THORChain announces integration of XRP stagenet ahead of the mainnet network launch

THORChain announces integration of XRP stagenet ahead of the mainnet network launch

THORChain announced on Tuesday that its stagenet development of its Ripple (XRP) integration is nearing the final step, with mainnet activation imminent. This integration enhances THORChain’s economic model by increasing swap activity and protocol fees. 

Bitcoin Weekly Forecast: BTC consolidates after posting over 10% weekly surge 

Bitcoin Weekly Forecast: BTC consolidates after posting over 10% weekly surge 

Bitcoin price is consolidating around $94,000 at the time of writing on Friday, holding onto the recent 10% increase seen earlier this week. This week’s rally was supported by strong institutional demand, as US spot ETFs recorded a total inflow of $2.68 billion until Thursday. 

Read full analysis
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

BTC

ETH

XRP