TRON DAO Purchases $10M Worth of USDD and TRX, USDD Remains Depegged
- The TRON DAO Reserve recently bought $10 million worth of USDD and TRX, but trouble still looms in the name of USDD depegging.
TRON DAO, the decentralized autonomous organization governing the Tron blockchain, has announced its most recent crypto purchase worth $10 million.
In a Tuesday tweet, the TRON DAO reserve noted that the buy included both USDD and TRX tokens. The move, it said, was meant to “safeguard the overall blockchain industry and crypto market.”
TRON DAO Buys the Dip to “Safeguard” Market
Of note, this is the second in a line of “buy the dip” purchases made by the organization since May. Previously, the DAO bought 500 Bitcoin (BTC) and 600 million Tron (TRX) tokens, collectively amounting to over $60 million (pricing at that time). The reserve gave the same reason for its May purchase – protection of the blockchain and crypto industry.
Reacting to the tweet, @crypto_youths said:
“$TRX should be given the credit it deserves, keeps building till the project speak[s] for itself.”
@MopsyPogue agreed, saying, “In this market stacking as little as possible is perhaps the worst move to do.”
But not everyone welcomed the news, choosing instead to focus on another issue that had been ailing the Tron blockchain.
USDD Depegged From the Dollar?
In early May, LUNA witnessed the depegging of its algorithmic stablecoin UST, and the cascade leading to its crash below $0. Shortly afterward, TRON DAO deployed $2 billion worth of TRX to prevent a UST-like crash of its algorithmic stablecoin USDD. At the time, TRON founder Justin Sun said the funds would be used to ward off attackers looking to send USDD to the grave.
A month later, the TRON DAO reserve withdrew 5.5 billion TRX tokens to maintain the USDD peg. The reserve withdrew the amount in two batches – 2.5 billion TRX on the first day, and 3 billion TRX on the second day. Still, USDD is yet to regain its full parity to the dollar – trading at $0.97 at writing time.
Differently, the TRON DAO reserve maintains that the stablecoin cannot be said to have depegged from the dollar. The organization also noted that USDD stablecoin is now overcollateralized at over 300%.
Some crypto onlookers have now mocked the term “overcollateralized,” saying USDD is showing early signs of impending doom.
Following the fall of Terra, Ethereum co-founder Vitalik Buterin cautioned of the technical glitches inherent in automated/algorithmic stablecoins. With algorithmic stablecoins carrying a muddied reputation, USDD’s resilience now remains to be seen.
TRON, at writing time, trades at $0.067, up 6.9% in the past day.