Justin Sun, the founder of Tron, announced on Tuesday that the TRON DAO Reserve had sent Tether (USDT) worth $100 million to Binance to purchase more BTC and TRX as a reserve.
The TRON DAO Reserve continues to buy BTC and TRX to keep its USDD algorithmic stablecoin stable despite market volatility.
The transaction led to the TRX’s price increasing by 2%, with the current price trading at $0.08097. However, due to market pressure, Bitcoin’s price fails to show any significant movement.
TRON DAO buys BTC and TRX to keep the USDD stablecoin afloat
TRON DAO Reserve oversees and manages the native stablecoin USDD. However, the broader crypto market’s sell-offs have put pressure on cryptocurrencies. Bitcoin and Ethereum prices have dropped approximately 6% and 8% respectively in the last 24 hours. Moreover, the SEC probe into Binance’s BNB ICO has severely hit on crypto prices.
Furthermore, Justin Sun and TRON DAO hope to avoid a repeat of the TerraUSD (UST) algorithmic stablecoin crash with its USDD stablecoin. As a result, the TRON DAO has purchased BTC and TRX worth $100 million as collateral to ensure the USDD stablecoin’s stability amid rising market pressure.
In fact, USDD has become the first decentralized stablecoin to be over-collateralized, having the highest collateral ratio of 130%. The TRON DAO Reserve’s website publishes the USDD’s real-time collateral ratio, which is 200.88%.
During the market turbulence in May, TRON DAO Reserve purchased 500 BTC and 600,000,000 TRX worth $60 million as reserves for its USDD stablecoin. The new algorithmic stablecoin was modeled after the UST algorithmic stablecoin. However, it later raised reserves and collaterals to strengthen the USDD stablecoin’s stability and credibility.
The TRON DAO Reserve presently holds 14,040 BTC, 140 million USDT, and 1.9 billion TRX. On top of the 8.71 billion TRX already burned to mint the USDD stablecoin
These are reasons for TRON DAO Reserve BTC, TRX recent purchase
There’s no denying that market pressure is increasing as Bitcoin and Ethereum continue to fall below critical $30k and $2k levels, respectively. The TRON DAO’s recent purchase could have been motivated by these factors. Such as the Fed’s inflation data due on Friday, bad technical charts, and regulatory pressure.
