Tron’s USDD stablecoin fell as low as $0.959 on Wednesday amid a broader cryptocurrency sell-off that has seen bitcoin drop below $21,000.
The algorithmic stablecoin entered its third day of trading below its dollar peg but has since recovered to $0.974.
The stablecoin lost its dollar peg on Monday in an on-going crypto market crash. The token traded $0.98 before dipping further. The depeg affected the price of TRX tokens which plunged about 16% to trade at $0.05.
The trend has reportedly caused pressure on the Tron blockchain. Tron DAO Reserve has been amassing assets to support the value of the stablecoin. The platform has bought more than 1 billion USDC recently and holds an additional $500 million in USDT, BTC, and Tron.
Tron DAO has announced that it will remove 2.5 billion TRX tokens worth $125 million from the Binance exchange to prevent traders from taking large short positions.
USDD uses an algorithmic model of minting and burning tokens like the collapsed TerraUSD. When the price of USDD is less than a dollar, the system allows users to burn one USDD to mint $1 worth of Tron.
Source: Twitter
To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will withdraw 2.5 billion #TRX out of binance.
— TRON DAO Reserve (@trondaoreserve) June 15, 2022
