TRON DAO Reserve, which manages the USDD stablecoin, says it is withdrawing 2.5 billion TRX out of Binance to “safeguard the overall blockchain industry and crypto market” after USDD went on to trade for less than $1 (roughly Rs. 78) for a third consecutive day. USDD first lost its peg on 13 June amid a broader market decline that saw the market cap of the industry dip below $1 trillion (roughly Rs. Rs. 77,68,270 crore). The sustained capitulation has led to a comparison with Terra’s UST, which was also an algorithmic stablecoin.
Justin Sun, the founder of TRON, had vowed the lost peg of the stablecoin would be soon recovered, and injected $220 million (roughly Rs. 1,709 crore) on Wednesday to purchase TRX on Binance.
The TRON DAO Reserve has since revealed plans to pull 2.5 billion TRON (TRX) tokens, worth about $125 million (roughly Rs. 971 crore), from the Binance exchange as it attempts to prop up the price of its USDD stablecoin against the US dollar.
To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve will withdraw 2.5 billion #TRX out of binance.
— TRON DAO Reserve (@trondaoreserve) June 15, 2022
TRON DAO Reserve had announced the move on Twitter at a time when USDD had fallen as low as $0.95 (roughly Rs. 74).
Tron DAO’s Binance withdrawal could limit the ability of short sellers to open up positions against the token — a move that appears to be having its desired effect as the token’s value hasn’t dipped further following the withdrawal. That said, USDD is yet to regain its peg and as per CoinGecko, is currently priced at $0.97 (roughly Rs. 75).
According to the official website, the collateralisation ratio of USDD, which aims to demonstrate how secure the stablecoin is, is sitting at 283 percent.
Following the collapse of Terra’s algorithmic stablecoin in May, TRON had announced a plan to significantly increase the amount of capital backing up its own stablecoin. USDD which is a near carbon copy of [Terra’s](https://gadgets360.com/tags/terra algorithmic stablecoin UST — arrived on the TRON blockchain on May 5. Initially designed to maintain its peg to the US dollar algorithmically, albeit, with some backing, USDD was over-collateralised to maintain a minimum collateral ratio of 130 percent, according to founder Justin Sun.