This Altcoin Could Crash Like LUNA!

The Tron network launched its stablecoin USDD in May, at the same time as Terra LUNA and UST crashed. USDD recently broke out of the $1 fixed point. Now there is cause for fear of a collapse.

Tron USDD lost $1 like LUNA

Tron USDD is struggling to maintain its $1 stable. However, it has now dropped to $0.98. USDD was launched in May 2022 during the Terra UST collapse, and Tron founder Justin Sun confirmed that special measures were in place to prevent a similar fate with TerraUSD.

This Altcoin Could Crash Like LUNA

Justin Sun also commented on the massive collapse of TerraUSD (UST). He reassured the Tron community that USDD is over-collateralized and that the Tron DAO is ready to tackle the de-peg. Despite Sun’s assurances, the stablecoin is struggling to rise to the $1 level. Meanwhile, it brought speculations with it.

At the time of writing, USDD is trading around 0.9868 after dropping to $0.99 on June 27, 2022. Tron spent over $2 billion in Bitcoin, USDC and Tron to build up its reserve. The DAO then spent $10 million buying USDD and TRX. Experts predict that advocating for USDD pegging could turn out to be an expensive business for the Tron DAO Reserve.

Crypto detective investigated USDD and uncovered them

Self-proclaimed internet detective Coffeezilla has been investigating Justin Sun’s new stablecoin, USDD, for a while. Expert says you are on your way to suffering from a de-peg and becoming the next UST. In a recent YouTube video, Coffeezilla said that USDD with a market cap of $723 million is far from being a decentralized algorithmic stablecoin.

As a result, Detective argues that the design of the USDD is similar to that of the LUNA/UST. The only difference is that the institutions in the white list are printing USDD and there is no USDD burning mechanism for TRON. This is great for USDD and while there is no room for arbitrageurs to push the stablecoin into a death spiral, it makes Tron’s algorithmic existence unstable. While the Tron DAO Reserve has collateral for USDD, Coffeezilla is unsure if they will use it to install the stablecoin stabilizer. Coffeezilla says:

USDD looks like a honeypot for individual investors to be dumped by Justin Sun.

The Bitcoin wallet associated with the Tron DAO Reserve has been around for over two years. Therefore, it is likely that the wallet is under the control of Justin Sun rather than the DAO. The researcher claims that the stablecoin is far from decentralized, as Sun prints about 94% of circulating USDD. There is a possibility that the collateral is actually Justin Sun’s personal property. Because it is responsible for a large percentage of mint, it bears the risk of stablecoin.

Tron’s stablecoin USDD price struggles below $1

Tron price is witnessing overnight losses while USDD is struggling to recover its price constant. AmkNews.com As we reported, USDD price is currently struggling to recover from $0.98 and $1. Based on data from CoinGecko, USDD lost its stable value on June 13, 2022. He has been struggling to make a comeback ever since.

Crypto analysts at Cowboy Trades see a bear flag pattern on the Tron price chart. As the altcoin continues to make lows, analysts expect a drop to $0.024.

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Larry Brown

I graduated from Yale University, Department of Television. I have been a professional news writer for 3 years. I am continuing my career here by establishing amknews.com site 3 months ago.