TronDAO To Withdraw A Further 3 Billion TRX From Exchanges, Making A Total Of 5.5 Billion TRX Withdrawn Since USDD Experienced A De-Peg.
TronDAO Reserve has been withdrawing billions of TRX from exchanges as the company tries to stabilize USDD.
A few days ago, Tron’s stable coin, USDD, experienced a brief de-peg from the USD following a sharp market decline.
The event sent the coin’s price to just below the US dollar at around $0.98. However, the de-peg didn’t last long as Tron was quick to inject more collateral to maintain the peg. Tron allocated around $2.5 billion for this purpose.
However, it appears that the effects of the collateral injecting didn’t solve the main issue completely. At the time of this writing, USSD seems to have de-pegged again. It’s currently trading at around $0.97 as shown on CoinMarketCap.
More Funds Needed
The de-peg seems to have triggered a need for more collateral, and now TronDAO Reserve has announced plans to withdraw a further 3 billion TRX from DeFi and CeFi protocols.
To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will withdraw another 3 billion #TRX out of Cefi exchange and Defi lending platform.
— TRON DAO Reserve (@trondaoreserve) June 16, 2022
These funds are most likely meant to be injected as collateral to further prop up the USDD’s position and maintain its peg. For one, a further or pro-longed de-pegging of the stable coin would lead to devastating effects on the Tron ecosystem and probably trigger a market downturn similar to what happened to Terra Luna and UST.
However, Tron has confirmed that it has enough collateral to keep the USDD pegged to the dollar.
These current developments occur in the wake of a strong bearish move that has seen the entire crypto market experience a double-digit pullback over the last week. Tron’s TRX has been one of the most affected.
The coin has experienced a price reduction of over 25% in 7 days. It currently trades at $0.059. It’s yet to be seen whether the current action by TronDAO Reserve will succeed in maintaining the USDD peg and if the market will be more forgiving henceforth.
Yesterday TheCryptoBasic published a complete report on whether Justin Sun Be Able To Save Tron & Protect USDD From De-Pegging.