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TRON’s USDD Stablecoin Dips Lower Despite Drop In Withdrawals

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TRON’s algorithmic stablecoin USDD de-pegging got no respite despite withdrawals from Huobi slowed down on the weekend, Nansen data showed.

The crypto exchange was in the limelight following the revelation of cutting down its workforce by 20%. As reported by TronWeekly, Justin Sun, the founder of TRON and a Huobi adviser, finally acknowledged Huobi layoffs in a text message to Reuters after days of denying them.

Its native token, TRX slid down by over 10% in a span of just 2 days and is currently trading at $0.054.

Soon Huobi customers began withdrawing to the tune of over $60 million in just 24 hour period and have surpassed $94 million.

After declaring that the exchange was firing staff, TRON founder Justin Sun moved $100 million worth of his stablecoins to his cryptocurrency exchange Huobi as a trust-building measure.

A closer look into data from Nansen revealed that the funds were moved from Binance to Huobi, where Sun owns a controlling share.

The money was distributed using Tether and USD Coin [USDC] [USDT]. Sun stated that he sent the “personal funds” to demonstrate confidence in the Huobi exchange in a later statement.

Martin Lee, a Nansen analyst, commented that the move “might be to help with the increased withdrawals or maintain a level of confidence in the exchange.”

By the middle of January 8, the rate of withdrawals had fallen to a little under $12 million compared to the previous day, according to Nansen data, demonstrating the impact of the steps taken to increase trust. Weekly withdrawals were down to $84 million from Friday’s $94.2 million total.

TRON’s USDD Price Is Still Down By 97 Cents

The price of Tron’s USDD, which is meant to be tethered to the value of the dollar like other stablecoins, has shifted between $0.983 and $0.972 over the course of the last week, though. It cost $0.977 at the time this article was being written.

In contrast to Tether and USD Coin, Tron’s USDD is an algorithmic stablecoin that relies on trading incentives and collateralized storage of crypto assets to maintain its price.

Algorithmic stablecoins came under scrutiny from the general public after Terra’s stablecoin, UST, unexpectedly dropped and lost $40 billion in value last year.

TRON Founder Attempts To Calm Nerves As USDD Drops Below $1

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TRON founder Justin Sun has announced infusing more capital as the stablecoin project USDD is spiraling out of control. The tweet also came with a link showing a wallet addressed to him that transferred nearly $1 million worth of TUSD.

Sun also asserted that USDD is 200% overly collateralized by numerous popular digital assets.

The price of the TRON USDD algorithmic stablecoin has dropped to $0.97, losing even more of its dollar parity. This could potentially put unwanted stress on USDD-paired DeFi pools on Curve.

Currently, USDD consists of over 80% of the USDD/3CRV pool reserves under Curve Pool DeFi protocol, down from a previous figure of 86%. The depeg would have a negative impact on swapping other DeFi assets like DAI or USDC in exchange for USDD.

The token’s prolonged depeg has cast doubts over the project’s sustainability. Some even wondered whether the dollar-pegged asset would go down like Terra’s stablecoin UST.

Last month, the crypto community speculated that USDD might be unsafe to hold with regard to certain unusual activities around the Tron stablecoin.

When USDD lost its $1 peg then, Twitter user Lookonchain on Nov 14 alleged that $548 million of the $990 million in the USDD’s reserve disappeared.

TRON Stablecoin Project Is Doomed like UST?

The tweet was accompanied by transaction trails showing that the USDD founder, Justin Sun, transferred $550 million from the stablecoin reserve to three different addresses for loan repayment.

1/ $USDD is not safe!#USDD has been depegged since Nov 9 and has not returned to the peg!#USDD reserves decreased by 548M $USDCJustin Sun used the 350M $USDC in the reserve to repay the loan in #Justlend.The real Collat. Ratio is only 50%!Here is some evidence.

— Lookonchain (@lookonchain) November 14, 2022

However, drilling deeper, the online sleuth alleged that almost 99% of the TRX tokens in the USDD reserve were unavailable. The implication is that the collateral ratio of the USDD stablecoin reserve is only 50%.

Furthermore, blockchain data showed that the USDD founder withdrew $170 million of a stablecoin token from Binance to the USDC issuer, Circle.

The UST algorithmic stablecoin reportedly lost its peg eight months ago as a result of some malicious actors drastically skewing the liquidity pool that includes the coin and three others.

Later, LUNA, a sibling token of UST, would experience a six-week decline from its all-time high price of $119.18 to $0.00001675.

TRON-Powered USDD “Dangerously Close” To De-Pegging

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TRON-based algorithmic stablecoin USDD is in a precarious situation of risking its peg amidst this week’s crypto contagion fanning fears of a domino effect.

An on-chain platform Lookonchain tweeted USDD started to depeg and was trading at $0.9788 on Nov. 10. It noted that the USDD vs. USDC/USDT/DAI pool was out of balance, with USDD accounting for 82.27%.

It all began when two whales swapped a total of over $11 million USDD in exchange for USDT and USDC in similar amounts.

According to the official website, the Tron stablecoin has a collateral ratio of 283%. The current supply is $725 million, and the collateral is $2.05 billion. Lookchain further checked the collateral details and found that over 99% of TRX was unavailable.

More troubling details came when all USDC assets were found to be deposited to Justlend which has been lent out, remaining only 596 million USDCs. With the addition of 14,040 in BTC, the actual Collateral ratio comes to 114%, increasing the chance of being heavily undercollateralized.

Launched in May 2022, USDD is the algorithmic stablecoin for the TRON blockchain. Founder Justin Sun earlier stated that the liquidity-strapped trading firm Alameda Research, a sister company of the financially troubled cryptocurrency exchange FTX, may have dumped its USDD holdings, causing the stablecoin to deviate from the peg.

The de-pegging of stablecoin values from their assumed exchange rate is a solid indicator of a liquidity crisis in the cryptocurrency market. Several stablecoins lost their pegs in May and June, and major lenders like 3AC, Voyager Digital, and Celsius Network experienced insolvencies.

TRON Founder’s Rescue Plan For FTX After Binance’s Retreat

In June, the USDD also declined to 96 cents, according to information from cryptocurrency market monitor CoinGecko.

That said, hours after Binance announced it would not proceed with a deal to acquire troubled cryptocurrency exchange FTX, Sun of TRON blockchain and the current ambassador of Grenada to the WTO, tweeted late on 9 Nov. that he and his team were “putting together a solution” with the entity.

Sun said his staff had been working around the clock to minimize future damage but offered no other information. The post was retweeted by Sam Bankman-Fried, the CEO of FTX.

Tron’s Justin Sun Lends A Helping Hand To Crisis-Struck Credit Suisse

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Tron founder Justin Sun has expressed interest to buy shares of embattled investment bank Credit Suisse and bring it to web3. It needs to be mentioned that, Credit Suisse Group AG’s steep decline has sent alarm bells ringing amid rumors that the No. 2 Swiss bank and one of the largest global investment banks are on the verge of collapse.

Ulrich Koerner, the bank’s CEO, tried to reassure staff over the weekend and recognized that the company was in a “critical moment” as it advanced its most recent overhaul plans.

According to The Financial Times, senior Credit Suisse executives spent the weekend dialing the phones trying to calm the nerves of its customers.

Credit Suisse’s market worth was $22.3 billion a year ago. Its market worth is currently only $10.4 billion, and the shares have decreased by 56.2%.

Many people associate Credit Suisse’s market instability with the Lehman catastrophe, which precipitated a global meltdown in 2008. According to reports, a poor conclusion could result in a shock like the one brought on by the collapse of the American bank Lehman Brothers in September 2008.

The CEO of the bank is anticipated to submit a strategic plan on October 27 in what is being viewed as the bank’s “D-Day” in order to prevent going bankrupt.

Nevertheless, the crypto industry has been too severely impacted by the market collapse and the lackluster price movement.

Tron Founder Aims To Onboard 100M Consumers

While at the Binance Blockchain Week conference, Sun discussed the TradFi market and stated, “We want our 100 million consumers to know that we genuinely take their money and their data seriously.”

Dismissing fears that Tron’s stablecoin would experience a collapse similar to the UST. He referenced USDD’s slower development strategy as the asset’s relative security.

And unlike Terra, Tron blockchain founder asserted that he can also provide a safety net for USDD, maintaining the peg with his own money if necessary.

Sun further stated that although the company’s market capitalization is barely $700 million, its daily trading volume is currently $100 million or more. According to volume and adoption, “in the future, we will steadily raise the market cap of USDD.”

TRON DAO Signs Up Wintermute To Mint & Redeem USDD

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TRON DAO onboarded one of the largest crypto exchanges Wintermute as its ninth whitelisted member to mint and redeem its algorithmic stablecoin USDD.

“We strive to function as the decentralized crypto reserve while consolidating the value of USDD as the true settlement currency. Welcome more institutions on board!”, the announcement read.

USDD is an algorithmic stablecoin on Tron, that is supposed to keep a one-to-one exchange rate with the U.S. dollar. It relies on an automated balancing mechanism that requires alternately creating and destroying units of USDD and its sister token TRX, the native cryptocurrency of the Tron blockchain.

To elaborate further, when the value of USDD falls below the $1 target, users can burn their USDD to mint TRX, restoring USDD’s price back to the target level.

Apart from that, the USDD stablecoin also maintains the peg with centrally controlled reserves. This reserve comprises of various tokens worth more than USDD’s total value and is held as collateral to prop up the stablecoin in the event of a crisis.

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TRON DAO Signs Up Wintermute To Mint & Redeem USDD 2

TRON DAO Expands Its Whitelisted Institutions

With respect, to the latest addition, Wintermute is now a part of the selected cahoots that have the exclusive right to swap between USDD and TRX. These parties are referred to as whitelisted institutions.

The leading global crypto market maker now joins eight other members of the Tron DAO, which are Alameda Research, Amber, Ankr, FalconX, Poloniex, Mirana, Multichain, and TPS Capital.

On being the newest member, David Micley, business development director at Wintermute stated,

“There is a lot of exciting activity going on in the Tron ecosystem which we’re seeing in terms of total value locked [TVL] and projects being built and we’re excited to find ways to get involved and contribute.”

Besides being a well-known crypto market maker on both centralized and decentralized crypto exchanges, Wintermute trades billions of dollars per month that comes with a vast experience in digital assets.

It has over $5 billion in average daily trading volume and is a one-stop shop for OTC trading, providing liquidity for both CEXs and DEXs.

The collaboration between the Reserve and Wintermute will see the latter act as an adviser and “make recommendations to enhance, develop, and supply general aid for the USDD network,” the statement said.

Tron DAO Pumps $20M USDD & TRX To Its Reserve

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The TRON DAO Reserve has added a total of $20 million worth of USDD and TRX to its reserves. Announcing via Twitter the DAO stated the move was undertaken “to safeguard the overall blockchain industry and crypto market.”

Minutes later Justin Sun, the blockchain’s founder, too chimed in by confirming the same. 

USDD, TRON’s algorithmic stablecoin launched just before the collapse of terraUSD drew inspiration from the latter’s model- creating and destroying units of UST and its sister coin called luna to have reserves to back the stablecoin.

Although, it did not meet the same fate but has struggled to maintain its peg to the U.S. dollar.

Last week, the DAO Reserve, which oversees and manages the stablecoin, said a certain degree of volatility in USDD’s price is inevitable, given its “decentralized” nature.

“Certain % of volatility is unavoidable,” the organization tweeted. “Currently, the market volatility rate is within +- 3%, an acceptable range. We will watch the market very closely and act accordingly.”

USDD was trading at around 99 cents at press times.

Tron’s Founder is willing to spend $5B to bail out Ailing crypto firms

Justin Sun, expressed his interest to join FTX’s Sam Bankman-Fried and Binance’s Changpeng Zhao in offering support to distressed crypto firms and could spend as much as $5 billion on acquisitions. 

“Lots of” companies have reached out to Sun and the team for help, Sun told The Block after his tweet emerged saying “ready to serve”.

Currently, Tron’s DAO has $2.3 billion in reserves. Sun also mentioned that the $5 billion would be a combination of Tron’s money, as well as his own.

Further he believes that the worst of the crypto winter is over: “I think currently the de-leverage process is passed the worst time. So we just need to clean it up and move forward. I don’t think [the] market will be super bullish, of course.”

As reported by TronWeekly, Tron’s total users reached 100 million on the blockchain’s 4-Year Anniversary.

At the time of publication, TRX’s value stood at $0.07, jumping by 75% from its recent low.

Justin Sun to the rescue of USDD

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In an attempt to save the peg of USDD, Justin Sun revealed today that he was increasing the reserve by 500 million USDC. To combat the exceedingly challenging market conditions, the TRON DAO Reserve team stated that USDD is now collateralized by 310 percent. The extra effort is being made to guarantee that the USDD does not end up like the UST.

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TRON’s recently established stablecoin (USDD) may be in peril only a few months after its inception. USDD is experiencing its toughest test yet, with the US-pegged stablecoin falling to $0.9807 at 07:52 UTC this morning. USDD has rebounded significantly as of press time, but it is still one cent short of the dollar, trading at $0.969412.

However, the de-pegging of USDD had trembled the crypto market enthusiasts by instilling a sense of fear in them. Nonetheless, Justin Sun had given clarity regarding the same.

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TRX workforce to increase as Justin Sun follows Binance

Justin Sun is following Binance’s lead in extending recruiting to help those who have lost their jobs due to the current market conditions. Justin Sun, the founder of Tron, has offered his support to anyone who has been laid off by a number of crypto companies.

Sun stated on Twitter that those who have lost their employment might apply for various positions in the TRX ecosystem.

“For those who have lost their jobs over the current extreme market condition, trondao, Poloniex, BitTorrent, usddio, apenftorg, DeFi_JUST, defi_sunio are all actively hiring! We are targeting to hire 50% more.”

Additionally, Binance appears undeterred by corporate hiring sprees and continues to hire. Crypto companies such as Crypto.com, Gemini, Coinbase, and BlockFi have all announced layoffs and hiring freezes.

Other companies, such as Bitso, Mexico’s largest cryptocurrency exchange, have just let off 10% of their workforce. Buenbit, a cryptocurrency exchange based in Argentina, has laid off 45 percent of its workforce.

In other news, Coinbase just revealed that, because of the difficult market conditions and economic volatility, it will lay off 18 percent of its workforce. Almost 1,100 employees were laid off, according to the company’s release.

Upbit Urge Caution On Investment In Tron & Waves’ stablecoins

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South Korea’s largest crypto exchange Upbit warns of possible risks to TRON [TRX] and WAVES after the duo’s algorithmic stablecoins projects- USDD and USDN started de-pegging. The TRON’s USDD has headed towards its all-time low at $0.57.

WAVES’ Neutrino USD too followed suit to stand at 95 cents, at press time. In the notice issued, the trading platform stated,

There is a concern that the pegging of USDN and USDD is not going well. As a result, the possibility of price fluctuations of WAVES and TRON [TRX] associated with each of the above stable coins may increase, so please be careful about investing in WAVES and TRON [TRX].

Upbit, further said it will continue to monitor these algorithmic stable coins or related digital assets, and urged members to be aware of increased price volatility if the de-pegging phenomenon escalates in the future.

Following the TerraLuna meltdown, stablecoins have been bearing the brunt and are on the brink of annihilation. Attention has been particularly shifted to Tron’s USDD as it continues to fall, with founder Justin Sun vowing to deploy $2 billion to prop up.

Amidst the current market mayhem, regulators around the world including South Korea have been putting up guardrails.

Upbit Removes Litecoin Over Privacy Function Concerns

A day ago, five South Korean cryptocurrency exchanges including Upbit announced to collectively delist Litecoin citing the crypto asset’s Mimblewimble Extension Blocks [MWEB] upgrade violates the country’s laws.

Three days back, South Korea’s Financial Supervisory Service [FSS] began an investigation into payment gateway services that focuses on digital assets. The FSS is the nation’s financial watchdog that operates under the Financial Services Commission [FSC], both of which are government institutions.

As per a local source, the FSS had recently demanded reports from 157 payment gateways about any service related to crypto, its plans for the future, and the disclosure of digital assets. But, an FSS report stated that only six held any digital assets.

The country’s authorities on May 31, 2022, announced that it is planning to launch a Digital Assets Committee which is deemed as a temporary solution to bring structure to the virtual asset industry following the Terra fiasco.

The proposed committee would bring forth new guidelines including screening criteria for newly-listed assets, market monitoring, trade monitoring, a level of disclosure, and other investor protections.

TRON Founder- “USDD’s New Makeover Will Spearhead The Stablecoin 3.0 Era”

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TRON founder Justin Sun today announced a new upgrade in its stablecoin project USDD which involved increasing transparency and adding collateral.

According to the medium post published, the project has upgraded itself to the first over-collateralized decentralized stablecoin [OCDS], which it claims to offer faster transactions with the highest collateral ratio.

By doing this, it aspires to advance the Stablecoin 3.0 era, making finance accessible to all.

As per the blog post, USDD enjoys a guaranteed collateral ratio of at least 130%, higher than the 120% set by DAI. The real-time collateral ratio of USDD is published on the TRON DAO Reserve’s website, publicly available 24/7.

Sun stated that the “upgraded, over-collateralized USDD will add more diversified features to underpin its stability. Currently, the 200%+ collateral ratio offers USDD a very strong safety net,” he claimed.

USDD, just like Terra’s algorithmic stablecoin UST, made its appearance on the TRON blockchain on May 5. The latest move is seen as a preventive measure to avoid a Terra Luna situation.

Tron Founder’s Future Roadmap of USDD

On May 31, founder Sun published a blog outlining the lessons he learned from Terra’s dramatic fallout. According to Sun, these lessons will be implemented in TRON’s decentralized stablecoin USDD.

In his blog, Justin mentioned that “Inorganic and unsustainable growth is bad” and “Transparent over-collateralization is critical to preventing depegging” were the lessons he learned after the Terra crash.

In addition to that, the attempt of Terra to establish the Luna Foundation Guard to diversify UST’s collateral and prevent depegging was already too late. The reserve consisted of just $3 billion worth of BTC, which was not enough to secure the nearly $19 billion UST supply, he wrote.

In Sun’s plans, The TRON DAO Reserve will create a utility for USDD across crypto markets to help drive its adoption. USDD trading pairs aim to have more liquidity than USDT or USDC on both centralized and decentralized exchanges.

The blog post concluded with a rough blueprint of USDD’s journey to be crypto’s new settlement currency.

USDD is also planning to extend its support to multiple chains. Currently, they are active on TRON, BNB Chain, and Ethereum.