Tron Modifies USDD Stablecoin to Avoid TeraUSD Troubles
Tron, which introduced the USDD algorithmic stablecoin last month, is trying to avoid the hassle of its partner token TeraUSD by increasing transparency and adding collateral.
The total USDD supply is about $668 million, Tron DAO Reserve Website And point out CoinGecko.
According to the TDR website, USDD currently has a collateralization ratio of 206%, while a guaranteed minimum collateral ratio of 130% will be maintained, according to a statement from the company on Sunday.
According to the statement, TDR’s site shows reserves of $710 million in TRX of Bitcoin, Tether and Tron, with a total of $1.37 billion in assets backed by USDD.
The move comes just weeks after Luna and the TeraUSD ecosystem collapsed, all but erased A combined market value that once exceeded $60 billion.
Tron founder Justin Sun said in a recent interview: “It was in the planning, but Terra/Luna definitely made it faster and a priority for our team.”
“We want USDD to be more collateralized, which I believe will make market participants more comfortable about our use in the future.”
Algorithmic stablecoins – which are meant to remain at a stable price, often $1 – have a troubled history.
Efforts like Neutrino and Basis have lost their dollar pegs, in some spectacular fashion, after the price drop in stablecoins.
Last month’s explosions of Luna and TeraUSD caused further devastation to the cryptocurrency complex, which is struggling as the Federal Reserve hiked rates and inflation remains high.
Bitcoin and Ether, the two biggest coins, are down more than 50% from their November highs and many digital assets are down even further.
Sunday said in an interview last month That Terra/Luna collapse offered a chance to accommodate other projects, and USDD would aim to raise $10 billion through TDRs to protect its peg.
Tron has performed relatively well among USDD efforts. At the end of April, the TRX token was the 24th largest token by market cap. It is now ranked 13th according to CoinGecko’s pricing.
Sun said that one takeaway he had on Luna and TeraUSD was that the Luna Foundation Guard was very passive, and had a strategy of buying and selling bitcoin that was “too easy to predict”, which would have made it easier to attack.
“The Tron DAO market will be very active and less predictable,” he said in a recent interview. “You make the market feel comfortable, but without revealing too much detail.”