Tron’s USDD stablecoin has lost its peg as its price dipped to $0.97, sparking fears of another UST collapse.
The Tron-based algorithmic stablecoin launched on May 5, and its market cap currently stands at roughly $708 million. Tron founder Justin Sun said USDD would be over-collateralized by low-volatile assets like USDT, USDC, Bitcoin, to avoid a repeat of UST’s collapse.
The Tron DAO Reserve shows the USDD supply at $725.3 million, with collateral consisting of TRX, BTC, USDT, and USDC totaling $1.4 billion in value — equating to a ratio of 200%.
Over the last seven months, USDD has mostly maintained its dollar peg besides de-pegging briefly on June 14, when it traded at $0.97.
According to CryptoSlate data, the USDD algorithmic stablecoin has lost its dollar peg again, as its current price sits at $0.978.
In addition, USDD is currently imbalanced on Curve as it accounts for 82% of the USDD/3CRV pool.
USDD’s recent depeg has spread fears and speculations about the collapse of another algorithmic stablecoin. Since the UST collapse of May 9, Wave-backed USDN has lost its dollar peg below $0.8.
USDD falling below its dollar peg has led to fear in the market causing Tron’s native TRX token to fall 3.5% over the last 24 hours.
Justin Sun to the rescue
Justin Sun said Tron is deploying more capital to restore the peg.
Deploying more capital – steady lads https://t.co/55pra5wQMi https://t.co/CexyaBy2hx
— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) December 12, 2022
CryptoSlate checked the Etherscan address shared by the Tron Founder and confirmed that roughly $200,000 TUSD has been deployed to rescue USDD so far.
When USDD first depegged on June 14, TRON DAO injected about $700 million USDC to restore USDD to its dollar peg.
