Tron’s USDT Reserve Has Been Moved To Purchase More BTC And TRX As Reserve

By enhancing transparency and adding collateral, Tron, which debuted the USDD algorithmic stablecoin last month, is hoping to avoid the troubles that its sibling currency TerraUSD experienced. As of Monday AM Asia time, the USDD has a collateralization ratio of 218%, according to the TDR website.

In a statement issued on Sunday, the company asserted that a guaranteed minimum collateral ratio of 130 percent would be maintained. TDR’s website shows $787 million in Bitcoin, Tether, and Tron’s TRX reserves, bringing the total amount of assets backing USDD in circulation to $1.4 billion.

The announcements come only weeks after the Luna and TerraUSD ecosystems crashed, wiping off a combined market worth more than $60 billion.

Tron founder Justin Sun said in a recent interview: 

“We want to have USDD to be overcollateralized, which I think will make market participants more comfortable about using us in the future.”

Luna and TerraUSD are two different currencies

The history of algorithmic stablecoins, which are designed to stay at a certain price, usually $1, is stormy. Neutrino and Basis have both lost their dollar pegs as a result of price reductions in the stabilizing token. Last month’s collapse of Luna and TerraUSD further wrecked havoc on the cryptocurrency industry, which is already struggling as the Federal Reserve hikes interest rates and inflation remains high. Bitcoin and Ether, the two most popular tokens, are down more than 50% from their November highs, and many other digital assets are down even more.

One of Sun’s takeaways from Luna and TerraUSD was that the Luna Foundation Guard was relatively passive and had a “very easy to foresee” purchasing and selling strategy for Bitcoin, making it easier to assault. Sun’s views were not addressed by Do Kwon, the Terra ecosystem’s founder, who did not respond to an emailed request for comment.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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