U.S. Fed's Vice Chair Barr Suggests CBDC Decision Remains a ‘Long Way’

MicroStrategy's Significant Bitcoin Impairment Losses May Mislead: Berenberg

Bitcoin Approaches Formation of Death Cross as Dollar Index Hints at Golden Crossover

Tron's Algorithmic Dollar-Pegged Crypto Project Purchases Millions of Tron, Bitcoin, and Tether to Defend USDD While Terra's Stablecoin Imploded

The Terra blockchain and its native crypto currencies LUNA and UST have been the center of attention for the past week. In less than three days, the USD value of both coins plummeted, and more than $46 billion vanished from the cyber ecosystem. The Tron DAO Reserve has continued to buy crypto assets for its digital currency-based forex reserves despite the chaos. Tron's founder Justin Sun and the Tron DAO Reserve purchased $38 million in tron on May 7, according to Bitcoin.com News (TRX).

Since then, the initiative has continued to buy cryptocurrency despite the market turmoil caused by the UST debacle. Terra's UST is identical to Tron's stablecoin USDD, which is an algorithmic dollar-pegged crypto asset. The Tron DAO Reserve stated that the team's goal is to "protect the overall blockchain sector and market, prevent panic trading caused by financial crises, and alleviate severe and long-term economic downturns" after purchasing 504.6 million tron (TRX). TDR (Tron DAO Reserve) also stated:

"As its early custodian, we also monitor USDD permissions and assure price stability through reserves."

The TDR continues to add funds to the reserve this week after purchasing 504.6 million trons. "To protect the global blockchain sector and crypto market, Tron DAO Reserve purchased 500 BTC for $15,515,675," TDR stated on May 10. The TDR announced the same day that it had paid $45.6 million for 595,729,832 tron. The TDR team observed that "USDD maintains firm in today's market volatility" although the crypto market was tumultuous that day.

"To secure the whole blockchain sector and crypto market, [TDR] have bought 1,000 BTC with an average price of $30,096 for $30,096,000," the TDR team tweeted the next day, May 11. Following that, the TDR organization purchased 1,467,612,695 TRX for $97 million as reserve currency. Following the $97 million purchase of tron, the TDR began purchasing stablecoins. On May 12, the TDR team explained:

"To protect the global blockchain sector and crypto market, [TDR] purchased 100,000,000 USDT for $98,200,000 at an average price of $0.982.

The TDR team didn't stop there, and they've continued to buy more coins to ensure the Tron network's stablecoin USDD is protected. The TDR announced on May 12 that it had purchased 200 million USDT for $0.985 per unit, totaling $197 million in US dollars. The Tron-based stablecoin reserve team then purchased 1,249.57 BTC for about $29,394 on average.

Justin Sun of Tron says he "still believes in algorithmic stablecoins."

The USDD stablecoin now has a market valuation of roughly $272.36 million, and there are 271,438,207 USD in circulation as of Saturday, May 14, 2022. USDD has witnessed $85.5 million in global transaction volume in the last day, and the crypto asset has the 156th greatest market value.

To create a single USDD, $1 worth of tron is required, similar to the Terra blockchain's technique of burning LUNA to produce UST. This means it can expand as big as the market allows because anyone can mint the stablecoin without permission. With the recent market upheaval caused by the UST de-pegging event, it's safe to say the crypto community is wary of algorithmic stablecoin assets.

Despite the problems this week, Tron founder Justin Sun told Tracy Wang of Coindesk that he remains confident about the algorithmic stablecoin approach. "I still believe in algorithmic stablecoins," Sun said in a Zoom conversation with Wang.

======