Justin Sun Will Allocate $2 Billion To Prevent USDD Collapse

Justin Sun saw signs of an imminent attack on the algorithmic USDD stablecoin launched on the Tron network in May.

The head of the Tron Foundation pledged $2 billion via TRON DAO Reserve to prevent USDD from losing its peg to the U.S. dollar, as happened with Terra USD (UST).

On May 11, the UST and LUNA prices collapsed. According to CoinGecko, as of this writing, the former asset is valued at $0.73 (down $0.23 at the time) and the latter at $1,16 ($0.69).

Sun pointed out the sharp rise in the cost of funding to open a short on TRX, which acts as collateral for USDD. According to his estimates, the figure jumped to 377.56% in annualized returns. Such figures reflect the bearish demand for the asset.

Sun expressed confidence that the actions he took will lead to liquidation of shorts.

At the same time, the head of the Tron Foundation said that Mirana Ventures became the fifth member of TRON DAO Reserve. Prior to that, Alameda Research, Amber Group, Polomiex and Ankr joined the organization.

Recall, on May 10 TRON DAO Reserve began its first operations on the purchase of reserve assets. The organization bought 500 VTCs at an average price of $31,000 for more than $15.5 million. The purchase of 595.7 million TRXs cost TRON DAO Reserve $45.6 million.

At the time of writing, the USDD issuance was the equivalent of $271 million. Since the issuance, rate deviations in either direction have not exceeded 1%, according to CoinGecko.

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