Tron’s native token, TRX, fell sharply in the past 24 hours as the blockchain’s USDD stablecoin broke free from its dollar peg.
TRX fell as much as 19% and is now trading at $0.05, its 15-month low. The token is also the worst performing in the top 50 cryptocurrencies in the last 24 hours.
Weakness in the token comes in the wake of the USDD algorithmic stablecoin losing its dollar peg despite multiple attempts by founder Justin Sun to back the peg.
USDD de-pegs amid crypto chaos
According to Coinmarketcap data, USDD fell to $0.9598, after trading below the dollar peg for more than two days.
The total market cap of the token has also fallen by about 1% in the past 24 hours to $701.4 million. Given its algorithmic nature, the token has drawn comparisons to Terra’s UST stablecoin, which fell into obscurity in May.
But Tron, like Terra, is mobilizing billions of dollars to back the token. Crypto analysts also argue that because USDD is not as big as UST – which was worth nearly $20 billion at its peak – it may not share the same fate.
Tron’s Sun had also recently adjusted USDD to increase its collateral and make it less vulnerable to a crash like Terra.
Tron Mobilizes Funds for USDD, TRX
Tron has staked about $700 million this week to support the USDD peg by purchasing the token in the open market. Justin Sun also said a $2.5 billion fund would be mobilized to support TRX.
Tron has repeatedly bought TRX to back the token and recently withdrew about 948 million ($47 million) from Binance. The Tron DAO has made multiple recordings of Binance, and has also mobilized its USDC holdings to buy more tokens.
Tron also announced that mining pool with Curve Finance and Convex Finance forecasting an APR of 96.25%, which is expected to attract traders looking for yield.
To further encourage USDD buying, Tron offers a 113.38% APR before staking the token.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.
This post Tron’s TRX Drops Nearly 20% as USDD De-Peg Deeper
was published first on https://coingape.com/tron-trx-slumps-nearly-20-usdd-depeg-deepens/