The TRON DAO Reserve reveals in a Tweet that it has acquired an additional $10 million in USDD and $10 million in TRX for its fallback.

The move comes as TRON Foundation looks to protect its ecosystem against the volatility of the cryptocurrency markets. Stablecoins are a key part of this strategy, with USDD being one of the most popular options.

The tweet says:

“To protect the comprehensive blockchain industry and crypto market, TRON DAO Reserve have copped another $10,000,000 #USDD and #TRX as a reserve.”

Following the present decline in the market, TRON’s reserves fell by a whopping USD twenty million and will be restored to their previous level. As the crypto recession continues, TRON is increasing its reserve at a steady rate.

TRON Foundation has also been actively working on expanding the use cases of its blockchain platform and launching new products.

Recently, it was reported that TRON is planning to launch a decentralized exchange (DEX) on its blockchain. The DEX is currently in the testing phase and is expected to be launched soon.

Justin Sun, the founder and leader of the TRON Foundation, confirmed the update by TRON DAO Reserve.

The battle to retain USDD dollar parity

The USDD is a stablecoin that is based on an algorithm, much like the UST (formerly UST) of Terra Classic (formerly Terra LUNA).

Stablecoins are digital assets that aim to maintain a stable value relative to some “peg” asset. In the case of USDD, that peg is the US dollar. To do this, every USDD in circulation is backed by an equivalent amount of U.S. dollars

To avert a similar demise as the USTC, TRON has collateralized the USDD with a TRON DAO Reserve.

The TRON DAO Reserve is a decentralized autonomous organization (DAO) that will manage the collateralized USDD. The Reserve will have two primary objectives: to maintain dollar parity for USDD and to stabilize the price of USDD in case of a bear market.

The DAO currently has $2.2 billion of BTC, USDC, USDT, TRX, and USD ten million more in USDD as collateral. The USDD is overcollateralized by about 316 percent.

The TRON DAO Reserve was funded with $2 billion recently, after spending a week trading below $1 in an attempt to distort the USDD dollar parity.

The USDD has spent one week trading below $1 and even dropped as low as $0.93 before recovering to the dollar party. TRON DAO has repeatedly introduced USDD and TRX several times.

The USDD stablecoin was supposed to help TRON, but it didn’t work out that way. TRON had to work hard to make sure the stablecoin didn’t fail like the UST.

TRON is currently the only blockchain with a working stablecoin and they will have to work hard to keep it that way.

The TRON DAO has been successful in keeping the USDD dollar parity but at what cost? The TRON Foundation has had to burn through a lot of its cash reserves. As of June 30, 2022, the TRON Foundation had $1.6 billion in cash and equivalents.

The USDD has been able to stay strong so far. However, the TRON token has lost about 50% of its value since its high in 2021.

The TRON Foundation seems to have anticipated this possibility and has added $20 million to its Stabilization Reserve Fund. This is in addition to the $10 million that was originally put in the fund.

The Stabilization Reserve Fund is meant to be used in case of a bear market. It can be used to buy back TRX or to stabilize the price of USDT.

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James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.