Stablecoin USDD based on Tron breaks $1 peg, Justin Sun Deploys More Capital

The USDD stablecoin, which was promoted by Justin Sun, the creator of Tron, and which is maintained by Tron’s decentralised autonomous organisation (DAO), reached its lowest point since June 22 when it sank to little less than 97 cents in U.S. currency early on Monday. The fall exceeded the 3% price fluctuation threshold set by the DAO, which determined whether or not price changes were deemed de-pegs.

On Monday morning, Justin Sun made the announcement on Twitter that he had successfully converted around $773,000 worth of Tron’s native stablecoin into USDD. The creator of Tron tweeted, “Deploying more capital—steady boys,” in an apparent parody of a message sent out by the CEO of Terraform Labs, Do Kwon, right before Terra’s collapse in May. The transaction data that Sun provided demonstrated that he had traded more than $203,000 in USDC and $570,000 in USDT for the USDD stablecoin. 

As a result of the failure of the cryptocurrency exchange FTX, which was once the third biggest in the world, investor trust in digital assets took a hit last month, which caused the USDD to depart from its intended exchange rate of 1:1 with the US dollar. Other popular stablecoins, like as tether (USDT), had some volatility in the aftermath of the FTX fiasco, but they rapidly found their footing again. According to the decentralised exchange Curve, the protracted de-pegging of USDD is accompanied by a continuous growth in the stablecoin’s dominance rate inside the USDD/3CRV liquidity pool.

As of 8:00 AM (ET) on December 12, the Tron stablecoin website reports that USDD is overcollateralized by 200.8%. The collateralized ratio on usdd.io is 200% in case anybody is wondering, Sun tweeted. The creator of Tron also said that “all live data can be checked on blockchain 24*7.”

Once previously, on November 10, 2022, the day before FTX filed for bankruptcy on November 11, 2022, USDD fell below the $1 peg. On November 10 the USDD dropped to $0.976, and on November 18 at 1 p.m., it was back in the $0.99 area (ET).

The USDD token issued by Tron is a decentralised stablecoin that was going to follow a mint-and-burn concept similar to Terra’s UST but was modified when Terra’s UST failed and the USD lost its peg. With the new framework in place, whitelisted members of the Tron DAO Reserve may now burn native Tron tokens (TRX) to mint more USDD stablecoins.