Algorithmic Stablecoin USDD Depegs from Dollar Again as Justin Sun Scampers
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The algorithmic stablecoin USDD created by Justin Sun has lost its peg to the dollar once more and has dropped below $0.96. Following the implosion of cryptocurrency exchange FTX, the native algorithmic stablecoin of the Tron blockchain was unable to regain its peg to the US dollar. As a result, Tron (TRX) dropped more than 2% in an hour and 5% over the past 24 hours.
Meanwhile, earlier today, Curve Finance had almost $4 million USDD in liquidity taken from it, accounting for approximately 12.83% of the pool’s entire stake. Tron’s USDD on Curve has a USDD/3CRV liquidity pool that is heavily lopsided, with USDD making up 86.1% of the whole.
According to Etherscan data, Justin Sun moved millions of TUSD in an effort to repeg USDD. Although it is still depegged, the USDD stablecoin unexpectedly increased from $0.970 to $0.976. In a tweet that read, “Deploying more capital – steady lads,” Justin Sun confirmed one transaction.
Deploying more capital – steady lads https://t.co/55pra5wQMi https://t.co/CexyaBy2hx
— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) December 12, 2022
The price of Tron (TRX) dropped more than 2% in just a few hours as a result of the USDD depegging. At $0.05236, the TRX price has decreased by about 5% during the last day.
Sun Accuses Alameda of Shorting Algorithmic Stablecoin USDD for FTX Liquidity Bump Purposes
The USDD stablecoin on the Tron network depegged to $0.97 during the FTX crisis, after Justin Sun accused Alameda of selling USDD in order to cover FTX’s liquidity. On-chain evidence, however, showed that the USDD algorithmic stablecoin selloff by whales was what actually led to the stablecoin’s depeg.
Supply and collateral for the USDD algorithmic stablecoin are managed by Tron DAO Reserve. Data from the Tron DAO Reserve shows that the entire amount of USDD collateral, which is backed by TRX, Bitcoin, USDT, and USDC stablecoins, has fallen to $1.45 billion. Additionally, today’s collateral ratio fell below 200.
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