Pulling the carpet out from under the speculators – After the disaster of Land (LUNA) and his USTand now Tron’s USDD stablecoin (TRX) which can no longer hold on to the US dollar. An attack of short sellingthat would stand up Binance, would be at the origin of this precision. The Tron project teams to react Consequentially.
A worrying USDD stablecoin hitting $ 0.958
From this Monday, June 13, 2022, the stablecoin USDD – on the blockchain tron – stays stuck below $ 0.99 (at best). This Wednesday, June 15, it even fell at $ 0.958, before recovering slightly. At the time of writing, the USDD is trading around $ 0.977.
In the graph below, we can clearly see the moment of the loss of indexing on the US dollar of this algorithmic stablecoin in the morning of June 13, as well as yesterday’s recent low above.
As previously reported Giustino Soleco-founder of Tron, this loss of parity of the USDD would be due to short selling huge against the TRX token. This is via the cryptocurrency exchange platform of Binance.
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Tron’s DAO drains TRX on Binance to stop speculation
The Tron DAO Reserve it is the autonomous decentralized organization which has the particular task of maintaining the stability of the USDD. It is in this context that she has announcement prepare to withdraw 2.5 billion TRX from Binance. This would represent approximately $ 150 million less liquidity, at the current price. All this for break this bearish speculation.
“In order to preserve the entire blockchain industry and cryptocurrency market, the Tron DAO Reserve will withdraw 2.5 billion TRX from Binance.”
In fact, short selling is (a lot) summed up sell active without owning it (on credit in a way), then having to pay it to redeem later when its price dropped. And collect the difference on purpose! Unless the price of the asset increases… In this case it is a lost which is cashed in, as the speculator has to buy back the asset at a price higher than what he had previously “sold”.
As Justin Sun mentions, the task is likely to be more and more arduous for bearish speculators. Why the financing rate negative of their position short (and therefore the interest to be paid) begins to become prohibitive.
“Funding Rates for Perpetual Swaps [vendeurs] on TRX they are at most -778% per year on Binance. “
At the time of writing, the the struggle continues therefore more beautiful on the USDD stablecoin, between bearish speculators and Tron DAO Reserve. The latter clearly announces that she will do everything for burned your pockets trader and try to get them to quit, so that Tron doesn’t know the same dramatic fate as the TerraUSD.
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