TRON will not abandon the USDD stablecoin
The project’s founder Justin Sun reported that he aimed at the healthy growth of the asset
16.05.2022 - 10:05
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What’s new? The TRON ecosystem has no plans to abandon the further development of its own algorithmic stablecoin USDD, despite the collapse of the UST stablecoin rates and the Terra (LUNA) token that backs it. This was announced by TRON founder Justin Sun.
I still believe in algorithmic stablecoins. The crypto industry is going to evolve and algorithmic stablecoins have got to be there. We just need more sophisticated and well-planned structures. Thinking about things like leverage, growth and risk. https://t.co/NrSXMmoNFA— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) May 14, 2022
What other statements did Sun make? According to the entrepreneur, the collapse of UST and LUNA was caused by the project growing too fast and not having enough money in the reserve fund. He stated that he still believes in algorithmic stablecoins and believes that this asset type should be present in the industry.
The TRON founder emphasized that during the development of USDD, the team was focused on the healthy growth of the asset and wanted the market value of the stablecoin to remain relatively small compared to the native TRX token and its market capitalization. In addition, the capitalization of USDD should be less than the amount of reserves in the TRON DAO.
What events happened before? On May 8, the algorithmic stablecoin UST lost its peg to the US dollar and continued to fall over the following week, reaching $0,03. The rate of the LUNA token securing it also collapsed to almost zero at $0,00002. As of 12:00 Moscow time on May 16, LUNA is trading at $0,000218 and UST at $0,157 (Binance data).
On May 11, Justin Sun expressed concern about the future fate of the TRX token. He suggested that the asset could follow the Terra token (LUNA) scenario amid a 100% funding of short positions on the Binance exchange. Sun announced a $2 billion allocation from the TRON DAO Reserve organization to prevent a negative scenario.
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