The Tron’s native token, TRX took a hit over the last 24 hours after it plummeted in value, meanwhile, USDD stablecoin de-pegging has also intensified.
TRX dropped as much as 19% and is now trading at $0.05, its lowest level in 15 months. In the last 24 hours, the token has also been the worst performer among the top 50 cryptocurrencies.
The token’s weakness follows the loss of the USDD algorithmic stablecoin’s dollar peg, despite founder Justin Sun’s repeated efforts to support the peg.
USDD will likely not share same fate as Terra UST
After trading below its dollar peg for more than two days, the USDD fell as low as $0.9598, according to Coinmarketcap data.
The token’s entire market valuation has dropped by nearly 1% to $701.4 million in the last 24 hours. Given its algorithmic nature, the token has garnered comparisons to Terra’s UST stablecoin, which vanished in May.
However, Tron, like Terra, is mobilizing billions of dollars behind the token. Because USDD is not as large as UST, which was worth roughly $20 billion at its peak, crypto analysts think that it may not suffer the same fate.
USDD had recently been changed by Tron’s Sun to strengthen collateralization and make it less vulnerable to a crash like Terra.
Tron mobilizes funding to support USDD and TRX
This week, Tron spent around $700 million to sustain the USDD peg by buying the token on the open market. Justin Sun also stated that a $2.5 billion fund would be set up to support TRX.
The Tron has purchased TRX on multiple occasions to support the token, recently withdrawing $948 million ($47 million) from Binance. The Tron DAO has made several withdrawals from Binance and has also used its USDC holdings to purchase more tokens.
Also, Tron has announced a mining pool with Curve Finance and Convex Finance, which is intended to attract yield-hungry traders with an estimated APR of 96.25%.
Tron is offering a 113.38% APR for staking USDD to further encourage the purchase of the token.
