Justin Sun Backs Over Collaterization of TRON USDD Stablecoin

Justin Sun Backs Over Collaterization of TRON USDD Stablecoin
  • There was a 218 percent collateralization ratio as of Monday.
  • TDR’s homepage displays $787 million in Bitcoin, Tether, and Tron’s TRX reserves.

As TerraUSD ran into problems, Tron, which released the USDD algorithmic stablecoin last month, hopes to avoid the same issues with its own currency. According to the data from CMC, the total supply of USDD is $668 million. There was a 218 percent collateralization ratio as of Monday, according to the TDR website. Still, a Sunday statement from the corporation said that a guaranteed minimum of 130 percent would be maintained.

Move Accelerated Due to Terra Ecosystem Collapse

TDR’s homepage displays $787 million in Bitcoin, Tether, and Tron’s TRX reserves to back up the USD. This adds up to around $1.4 billion worth of assets in all. Luna and TerraUSD ecosystems crashed a few weeks ago, wiping down a combined market worth over $60 billion. These movements come shortly after this. Justin Sun, the founder of TRON ecosystem, recently backed the over-collateralization of USDD stablecoin.

Justin tweeted:

“This has been in the plan, but Terra/Luna definitely accelerated and prioritized this for our team… We want to have #USDD to be #overcollateralized, which I think will make market participants more comfortable about using us in the future.”

The history of algorithmic stablecoins, which are aimed at maintaining a set price, usually $1, is rocky. Efforts like Neutrino and Basis have had their dollar pegs yanked, some spectacularly, when the stabilizing token’s value dropped. Although the USDD stablecoin has been the primary driver for TRON’s price right from its launch.

Last month, Luna and TerraUSD’s demise exacerbated the cryptocurrency market’s woes as the Federal Reserve raised interest rates and inflation continued to rise. The two most popular cryptocurrencies, Bitcoin and Ether, are down more than half from their November highs, and many other digital assets have fallen much more. As a result of the Terra/Luna debacle, the USDD plans to raise $10 billion via TDR to maintain its peg; Sun stated in an interview earlier last month.

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