Tron founder Justin Sun announced on Monday he swapped nearly $773,000 worth of Tron’s native stablecoin (CRYPTO: USDD).
Sun imitated Terraform Labs CEO Do Kwona's tweet from just before Terra's bankruptcy in May by writing, "Deploying more capital—steady lads."
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Sun shared transaction data for the USDD stablecoin, which showed him exchanging more than $203,000 in (CRYPTO: USDC) and $570,000 in (CRYPTO: USDT).
USDD, which is typically indexed to the value of the dollar, has been trading below $1 since the end of October.
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On Monday, USDD nose-dived to reach its all-time low of $0.97.
Following Sun's significant swap, CoinGecko data now indicated USDD was trading at $0.98.
With a market capitalization of $711 million, USDD is the eighth-largest stablecoin.
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This is a far cry from the market leaders USD Coin and Tether, the latter of which has a market value of more than $65.7 billion.
What is Tron’s USDD?
Decentralized stablecoin USDD from Tron was originally going to follow Terra's UST's mint-and-burn design, but it was changed after Terra's failure when USD lost its dollar peg.
The Tron DAO Reserve's whitelisted members can now burn native (CRYPTO: TRX) tokens to produce extra USDD stablecoins.
A similar mechanism was used by UST, where users may create extra UST by burning the native (CRYPTO: LUNA) token of the network.
According to the project's whitepaper, Tron asserted USDD was overcollateralized, supported by Bitcoin (CRYPTO: BTC), USD Coin, TRX and other "highly liquid" tokens.
According to USDD, the number of tokens supporting the stablecoin is likewise 200% overcollateralized.
Still, this hybrid strategy did not seem to be inspiring much confidence in investors given the stablecoin's protracted period of de-pegging, which included today's new low.
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Photo: Satheesh Sankaran via Shutterstock