Tron will withdraw 2.5 billion TRX from Binance to protect its stablecoin USDD

Pulling the rug out from under speculators – After the disaster of Terra (LUNA) and its USTit is now Tron’s USDD stablecoin (TRX) which can no longer cling to the US dollar. An attack of short saleswhich would stand on Binance, would be at the origin of this precision. The Tron project teams react Consequently.

A worrying USDD stablecoin touching $0.958

Since this Monday, June 13, 2022, the stablecoin USDDon the blockchain tron – remains stuck below $0.99 (at best). This Wednesday, June 15, he even went down at $0.958, before recovering slightly. As of this writing, the USDD is trading around $0.977.

On 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 mentioned above.

Price of the USDD stablecoin against the US dollar – Source:

As previously denounced Justin Sunco-founder of Tron, this loss of parity of the USDD would be due to short sales massive against the TRX token. This via the cryptocurrency exchange platform of Binance.

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Tron’s DAO dries up TRX on Binance to stop speculation

The Tron DAO Reserve is the decentralized autonomous organization which is notably in charge of maintaining the stability of the USDD. It is in this context that she has announcement be ready to withdraw 2.5 billion TRX from Binance. This would represent approximately $150 million less liquidity, at the current price. All this for to break this bearish speculation.

“In order to preserve the entire blockchain industry and the cryptocurrency market, the Tron DAO Reserve will withdraw 2.5 billion TRX from Binance. »

The Tron DAO Reserve goes on the offensive against speculators.
Twitter account @trondaoreserve

Indeed, short selling consists of (very) summarized sale active without owning it (on credit in a way), then having to owe it redeem later when its price dropped. And collect the difference by the way! Unless the price of the asset increases… In this case it is a loss which is cashed in, since the speculator must buy back the asset at a higher price than he “sold” it previously.

As Justin Sun mentions, the task is likely to be more and more arduous for bearish speculators. Because the financing rate negative of their position shorts (and therefore the interest to be paid) begins to become prohibitive.

“Funding rates for perpetual swaps [vendeurs] on TRX are at best -778% per year on Binance. »

Tron TRX short sellers are paying dearly for their positions.
Twitter account @justinsuntron

At the time of writing, the fight continues therefore more beautiful on the USDD stablecoin, between bearish speculators and the Tron DAO Reserve. The latter clearly announces that she will do everything to burn your pockets traders, and try to make them let go, so that Tron does not know the same dramatic fate as the TerraUSD.

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