TRON DAO Deploys $2 Billion to Protect TRX Following the LUNA Crash
With Terra getting in the news in the past several days for its failing stablecoin, Justin Sun reassured that the TRON DAO Reserve plans to allocate $2 billion to fight potential attacks against TRX, which seems to be the next target after LUNA.
- In the past week or so, all eyes in and outside the crypto community have been on Terra and its two native cryptocurrencies – LUNA and UST. As CryptoPotato summarized earlier, UST, a stablecoin supposed to be pegged 1:1 with the USD, lost that peg, and its price dumped to a low of $0.2 on Binance.
- Since it’s an algorithmic stablecoin with new tokens issued when users burn LUNA and vice-versa, this massive crash allowed speculators to capitalize on the situation by arbitraging.
- This led to a mind-blowing price drop for LUNA, which as of writing these lines, trades at $1.15. This means that the token has lost roughly 98% of its value in less than a week.
- Due to some similarities in how the stablecoins of Terra and TRON work (both being algorithmic), Justin Sun warned that his project could be the next target of similar attacks.
- He took it to Twitter to outline the potential threat, saying that the funding rate of shorting TRX on Binance has exceeded 100% APR, later updating that the percentage has gone to nearly 400.
- However, Sun reassured that the TRON DAO Reserve plans to deploy $2 billion to fight against something similar happening to his project as it did with Terra.
- Sun also noted that USDD (unlike UST) has remained “very stable” amid the latest market volatility. Additionally, he said USDD has a total market cap of $271 million, while the TRON DAO Reserve holds $10 billion.
#USDD remains very stable in today’s market volatility. Current the total cap of #USDD is $271 million and total reserve in @trondaoreserve is $10 billion. pic.twitter.com/c9wwbBGsJx
— H.E. Justin Sun (@justinsuntron) May 11, 2022
