As its price dropped to $0.97, Tron’s USDD stablecoin lost its peg, raising concerns about a potential second UST crash.
The Tron-based algorithmic stablecoin went live on May 5 and has a market worth of over $708 million right now. In order to prevent a repetition of UST’s collapse, according to Justin Sun, founder of Tron, USDD will be heavily collateralized by low-volatility assets like USDT, USDC, and Bitcoin.
According to the Tron DAO Reserve, the USDD supply is $725.3 million, and the value of the TRX, BTC, USDT, and USDC collateral is $1.4 billion, or 200% of the USDD supply.
The USDD has largely maintained its peg to the dollar throughout the past seven months, with the exception of a temporary de-peg on June 14 when it traded at $0.97.
The USDD algorithmic stablecoin has once again lost its peg to the dollar, according to data from CryptoSlate; it is currently trading at $0.978.
In addition, because it makes up 82% of the USDD/3CRV pool, USDD is now unbalanced on Curve.
The recent depeg of USD has raised concerns and rumours about the demise of another algorithmic stablecoin. The Wave-backed USDN has lost its dollar peg below $0.8 after the UST crash on May 9.
Fear in the market as a result of the USDD deviating from its dollar peg has caused the price of TRX, the native token of Tron, to drop 3.5% during the past day.
To read our blog on “Why is Tron surging while other cryptocurrency prices are falling today?,” click here
