TRON DAO Reserve is prepared to withdraw another 3 billion TRX tokens from a centralized exchange and a decentralized finance (DeFi) lending protocol as part of efforts to prevent a similar occurrence of Terra’s UST collapse.
The foundation announced the news in a tweet Thursday, June 16, 2002. The DAO has not yet identified the CeFi and DeFi platforms on which withdrawals will take place.
The foundation announced that it will withdraw a total amount of 5.5 billion TRX. The planned withdrawals are part of efforts to shrink liquidity for short traders and prevent a collapse, as was the case for Terra’s UST stablecoin.
Short-traders will be stopped from dumping the TRX price as the token is used for USDD redemptions like LUNA and UST. They can cause TRX’s value to plummet sharply and the coin won’t be able to redeem USDD.
As previously reported by CryptoPotato, the decentralized organization revealed plans to withdraw 2.5 billion TRX tokens from Binance to “safeguard the blockchain industry and crypto market.”
TRON DAO Reserve deposited $100 million USDC to Binance in order to purchase TRX, and then further deployed $120 million to purchase the token.
Sun had earlier stated that TRON DAO will inject $2Billion to help fight short positions on Binance as well as protect the USDD peg.
According to CoinGecko, USDD has yet to parity with the U.S. Dollar. However, the algorithmic stablecoin trades at $0.97 right now. TRX’s price, on the other hand, is $0.060.