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What TRON DAO is doing to defend the peg of USDD stablecoin given its fall to $0.97?

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The newly launched USDD algorithmic stablecoin of TRON network started facing hobbling situations already

It’s not been long since the crypto market experienced the collapse of a crypto asset in the form of Terra network’s algorithmic stablecoin UST which lost its parity with the US dollar. The collapse of UST stablecoin created a massive ripple effect in the whole crypto market reflected in the trading prices of most cryptocurrencies. Fall of TerraUSD created a void in the crypto market that gave opportunity for other such products to enter the space and fill the gap.

Taking advantage of such an opportunity, TRON network launched its own algorithmic stablecoin USDD. While the market is going through an extreme bearish zone and has not fully recovered yet from the bloodbath caused by the depeg instance of Terra network UST stablecoin. Given such situations, another stablecoin project has started showing the signs of going through distress that is creating fears and speculation inside the crypto community. 

This came in the wake of a price drop in USDD stablecoin that dipped $0.97 by Monday. When the stablecoin dropped, the market started looking at it as losing parity with the US dollar and the fear and uncertainty regarding the newly launched project started increasing. Many have even anticipated it to follow the footsteps of previously fallen Terra (LUNA) network. Several reports are there stating that about $1 million worth USDD swapped to about 997,339 Tether (USDT) stablecoin. 

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While on the other hand a prominent blockchain analytics platform goes by the name Nansen has also found that one of those funds that got capitalized during the depegging of UST stablecoin has started transferring large amounts of TORN network’s USDD stablecoin and other such stablecoins.

Nanses in its tweet stated that given the data outlining the collateralization of USDD stablecoin, there are arguments from researcher Resdegen who is looking for the stablecoin’s backing, saying that USDD has only 92% of collateralized assets. He further said that additionally, without pegging TRON’s native assets TRX, collateralization value of USDD would drop to 73%. 

Given the extreme macroeconomic conditions made crypto market see deep dive, the TRON DAO Reserve seems to respond and it recently has announced that it had received about 700 million USDC stablecoin. These USD Coins will be allocated to defend the peg value of USDD. The team believes that with this move came into play, collateralization ratio of USDD stablecoin is now reached upto 300%. 

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