On Monday, the crypto market was hit with a slump. But for TRON, things have been steadily deteriorating since the Tron DAO Reserve had to allocate resources after its stablecoin de-pegged.

The Tron DAO is a community-led project that is responsible for the maintenance and governance of the TRON network. It is similar to Ethereum’s Decentralized Autonomous Organization (DAO).

The Reserve is a key part of the Tron DAO and is tasked with maintaining the price stability of the TRON Stablecoin (USDT). The Reserve is funded by TRX holders who lock up their tokens in return for USDT.

On Monday, the USDD stablecoin began the week by depreciating to as low as $0.97. Something that prompted a comparable reaction in TRX prices, which had dropped 18.68 percent to $0.06291 at press time.

At the time of writing the USDD stablecoin was still trading for $0.9892. And had not yet recovered its Dollar parity. The price of TRX had also not yet recovered and was trading at $0.06316.

The Tron Foundation has responded to the situation by announcing that. It will add more assets to the Reserve to stabilize the price of USDT.

USDD’s stability is on the line, according to Sun

Justin Sun, the president of Tron Foundation. Promises to place the sum of $2 billion for the USDD to be at parity with the dollar.

The Tron Foundation’s decision to add more assets to the Reserve. Follows a similar move by MakerDAO, the company behind the Dai stablecoin.

On June 11, the MakerDAO team announced that. It would increase the size of its Stablecoin Dai Stability Fee from 0.5 percent to 1.5 percent to “maintain Dai’s 1:1 peg to the US dollar.”

To keep the USDD linked to the dollar, the TRON DAO has already sent out 700 million USDC tokens. This is according to tweet by Sun.

The USDD stablecoin’s present scenario appears to be following the same path as Terras UST (UST) stablecoin, which was recently launched.

On June 5, the price of TerraUSD (UST) crashed by over 50 percent after the South Korean exchange Bithumb delisted the stablecoin.

The move by the TRON Foundation to add more assets to the Reserve is a positive step in the right direction. And should help to stabilize the USDD stablecoin.

When the UST first de-pegged. Do Kown announces that they would be injecting more capital to try and keep the UST pegged to the US Dollar.

The same is being done by the TRON Foundation with the USDD. This time, however, the Foundation is adding more than just USD to the Reserve.

They are also adding EUR and GBP. The move is an attempt to stabilize the USDD and keep it pegged to the dollar.

Steering clear of Terra’s path

To steer clear of the same route as the TerraUSD, Sun states that the USDD will be overcollateralized at 130 percent. Sun also says that the Foundation would reserve the right to buy or burn USDD to keep its price stable.

The move by the TRON Foundation is a good one and should help to stabilize the USDD stablecoin. It remains to be seen, however, how successful it will be in the long run.

Sun also states that TRON DAO will spend $2 billion to battle Binance’s negative finance. He also said there would be a short squeeze on TRX tokens in the next few days or weeks. Resulting from an impending long squeeze on Binance.

The TRON Foundation has taken some proactive measures to ensure the stability of its USDD stablecoin. This should help to keep the price of USDD stable in the short term.

It will be nice to what you think about this!

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.