TRON: It turned out that the Tron DAO reserve will purchase $100 million worth of Bitcoin (BTC) and Tron (TRX) as reserves. This plan was revealed through a tweet from Tron founder Justin Sun. Here are the details…
TRON’s Justin Sun’s tweet heralded the new plans
TRON is one of the largest Blockchain networks in the industry. It was founded by Justin Sun, a hugely popular cryptocurrency figure player known for his marketing. AmkNews.com As we have also reported, TRX is the native cryptocurrency used in TRON. The ecosystem also has a stablecoin, USDD. USDD is created by TRON DAO as a stable payment currency. The TRON DAO’s reserve oversees all stablecoins on the TRON Blockchain and manages the native TRON USDD stablecoin.
Stablecoins are cryptocurrencies that were created to withstand price fluctuations that would normally cause volatility and sometimes a loss of liquidity to other cryptocurrencies. A recent tweet by Justin Sun reveals that TRON plans to purchase $100 million worth of Bitcoin and TRX to be used as a reserve to stabilize USDD. This will happen through the provision of TRX and BTC reserves as collateral. Therefore, algorithmic formulas are used to control supply and demand. TRON moved 100 million USDT to the Binance exchange for this purpose.
Tron DAO reserve mobilized USDT reserve to buy more BTC and TRX as reserve.
Why did TRON choose such a path?
It wasn’t immediately clear what triggered TRON’s move, but given the recent collapse of UST, a stablecoin created by Terra, other companies like TRON want to take action to protect their stablecoins, in this case USDD, from facing a similar fate. not surprising. As AmkNews.com previously reported, on May 10, Tron DAO purchased 600 million TRX and 500 Bitcoins for an average of $31,000 and $45.6 million for over $15 million. Overall, TronDao has spent more than $60 million maintaining its reserves.
At the time of this writing, USDD is trading at a flat price of $1 with little variation. TRX is trading at a decent price of $0.08, down about 4% over the 24-hour period. The Bitcoin market has been volatile lately, swinging between $29k and $31.5k. However, a $100 million purchase could set it in motion and possibly affect the price, according to experts. However, the amount remains small compared to the larger BTC market.
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