TRON DAO Reserve Withdraws 2.5 Billions TRX from Binance to Protect USDD Peg

The last thing Justin Sun – founder of TRON – would like to see is the UST-Terra fiasco being repeated again on his stablecoin project USDD. On Wednesday, the confident founder of TRON, who had promised that the stablecoin’s lost peg would soon be recovered, invested $220 million to buy TRX on Binance.

According to Tuesday’s announcement, he still had $280 million in reserve for the defense of the peg.

Following Terra’s debacle, Justin Sun’s algorithmic stablecoin USDD has been the new target by short-sellers.

As market selloffs deepened, TRX – one of the predominant crypto assets that back USDD as collateral – has been down over 30% in the past seven days, causing its sister stablecoin to lose peg, as reported.

In order to maintain that dollar parity, the DAO Reserve – the foundation behind the stablecoin – deployed $100 million USDC to Binance for TRX purchase on Wednesday Within hours, the foundation had already been established. injected another $120 million will be needed to support its price.

The Reserve revealed it had previously received $500 million more to protect the USDD peg.

Besides actively purchasing such an asset, the Reserve announced the withdrawal of 2.5 billion TRX from the exchange to “safeguard the overall blockchain industry and crypto market.”

This strategy is intended to reduce TRX’s circulating supply, which means that short-sellers must pay a higher price to short the asset. As sellers run out of bullets, resulting in the decline of selling pressure, the asset’s price could, theoretically, go up again.

Sun supports the mass withdrawal to fight the short sellers. tweeted:

Although the founder had announced a $2 billion investment Monday to combat short sellers, the stablecoin failed to regain its peg over the past two days. After a series of measures, USDD is trading slightly above $0.97.

According to the official website, the collateralization percentage of USDD is currently at 314%. This is to show how secure stablecoins are.

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