TRON DAO Reserve To Buy $100 Million Worth Of BTC And TRX As Reserves.
TRON is arguably one of the largest blockchain networks in the industry. It was founded by Justin Sun, a rather popular crypto player known for his marketing and attention-courting antics. TRX is the native crypto coin used on TRON.
The ecosystem also has a Stablecoin, the USDD. USDD is issued by the TRON DAO as a stable settlement currency. The TRON DAO Reserve oversees all stablecoins on the TRON blockchain and manages the native TRON USDD stablecoin.
Stablecoins are meant to withstand price fluctuations that would normally cause volatility and sometimes loss of liquidity to other cryptos.
A recent tweet by Justin Sun reveals that TRON is planning to buy $100 million worth of Bitcoin and TRX to be used as a reserve for stabilizing USDD. This would be by way of providing the TRX and BTC reserves as collateral. As such, algorithmic formulas are used to control supply and demand. TRON Has moved 100 million USDT to the Binance exchange to that effect.
.@trondaoreserve moved #USDT reserve to purchase more #BTC and #TRX as reserve. https://t.co/mkK2aEAR2n
— H.E. Justin Sun ???? (@justinsuntron) June 7, 2022
Precautionary Measure?
It was not immediately clear what triggered the move by TRON, but given the recent crash of UST, a stable coin created by Terra, it’s not surprising that other entities like TRON would want to take precautions to prevent their stablecoins, in this case, USDD, from meeting a similar fate.
On May 10th Tron DAO purchased 500 Bitcoins with an average price of $31,000 for over $15M and 600M TRX for $45.6M. Overall, TronDao spent over $60M to maintain its reserves.
At the time of this writing, USDD is trading at a stable price of $1, with a negligible variation. On its part, TRX is trading at a decent price of $0.08, with a 24-hour decrease of around 4%.
Will It Impact Bitcoin?
The Bitcoin market has been volatile lately, swinging between $29k and $31.5k. However, a purchase of $100 million could give it a push and possibly impact the price. However, the amount is small compared to the larger BTC market.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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