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The founder of TRON, Justin Sun, revealed that funds from TRON DAO’s reserve will be deployed to preserve the funding rate of TRX from shorting on Binance. He tweeted that the position of TRX on Binance was precariously short and that a “short squeeze is coming” in the next 24 hours. Justin also announced in his tweet that funds worth $2 billion were going to be deployed to fight this position.
Large Injections into TRON DAO to preserve USDD
In the hours following his tweet, TRON DAO’s reserve witnessed injections worth 800 million USDC as attempts to save the USDD peg from collapsing. The stablecoin USDD functions by burning TRX to maintain its dollar parity. To avert a repeat of a UST-LUNA market collapse, USDD has adopted a strategy of over-collateralizing USDD by acquiring multiple assets such as TRX, BTC, and stablecoins such as TUSD, USDC, USDJ, USDT, etc. on a scale of 1 to 1.3.
Meanwhile, the USDD collateralization ratio, which is supposed to help ensure the stablecoin’s safety and security, is currently at 280 percent on the official website. Nonetheless, USDD’s peg has been attacked in recent hours, as the entire cryptocurrency market has been thrown into disarray. According to CoinMarketCap data, the algorithmic stablecoin’s USD value has plummeted to $0.98:
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