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Tron founder Justin Sun announced on Monday he swapped nearly $773,000 worth of Tron’s native stablecoin (CRYPTO: USDD).
Sun imitated Terraform Labs CEO Do Kwona's tweet from just before Terra's bankruptcy in May by writing, "Deploying more capital—steady lads."
Sun shared transaction data for the USDD stablecoin, which showed him exchanging more than $203,000 in (CRYPTO: USDC) and $570,000 in (CRYPTO: USDT).
USDD, which is typically indexed to the value of the dollar, has been trading below $1 since the end of October.
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On Monday, USDD nose-dived to reach its all-time low of $0.97.
Following Sun's significant swap, CoinGecko data now indicated USDD was trading at $0.98.
With a market capitalization of $711 million, USDD is the eighth-largest stablecoin.
This is a far cry from the market leaders USD Coin and Tether, the latter of which has a market value of more than $65.7 billion.
What is Tron’s USDD?
Decentralized stablecoin USDD from Tron was originally going to follow Terra's UST's mint-and-burn design, but it was changed after Terra's failure when USD lost its dollar peg.
The Tron DAO Reserve's whitelisted members can now burn native (CRYPTO: TRX) tokens to produce extra USDD stablecoins.
A similar mechanism was used by UST, where users may create extra UST by burning the native (CRYPTO: LUNA) token of the network.
According to the project's whitepaper, Tron asserted USDD was overcollateralized, supported by Bitcoin (CRYPTO: BTC), USD Coin, TRX and other "highly liquid" tokens.
According to USDD, the number of tokens supporting the stablecoin is likewise 200% overcollateralized.
Still, this hybrid strategy did not seem to be inspiring much confidence in investors given the stablecoin's protracted period of de-pegging, which included today's new low.
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Photo: Satheesh Sankaran via Shutterstock
