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This Altcoin Project Will Buy Massively To Avoid Collapse!

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The crash of the Terra USD (UST) algorithmic stablecoin was a lesson for other projects. Recently, Tron’s USDD stablecoin also lost its $ 1 anchor. The altcoin project Tron DAO, which does not want to suffer the same fate, has decided to intervene early. Against this backdrop, TRON DAO Reserve announced its plans to withdraw significant amounts of TRX from its trading platforms.

TRON DAO will withdraw another 3 billion TRX to protect the USDD peg

Tron DAO Reserve is taking early action to avoid a similar USD land (UST) collapse. The altcoin project is preparing to withdraw another 3 billion TRX tokens from a centralized exchange and decentralized finance (DeFi) lending protocol as part of its efforts.

Tron DAO did not specify the CeFi and DeFi platforms where withdrawals will take place. The foundation plans to withdraw a total of TRX 5.5 billion with the latest announcement. Scheduled withdrawals are part of efforts to reduce liquidity and prevent a collapse for short-term traders, as is the case with Terra’s UST stablecoin.

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kritptokoin.com As previously reported, Traon DAO announced its plans to withdraw 2.5 billion TRX tokens from Binance. Altcoin said it did so in the name of “protecting the blockchain industry and the cryptocurrency market.” TRON DAO Reserve’s goal is to withdraw TRX 2.5 billion, making it more difficult for short sellers to disclose the asset.

In the wake of the Earth crash, Justin Sun’s USDD algorithmic stablecoin has become the new target of short sellers. On Tuesday, TRX, one of the dominant cryptocurrencies backing USDD as collateral, plummeted by more than 30% in the past seven days due to intensified market sales. That’s why its sister stablecoin lost its dollar anchor.

What is the purpose of the altcoin project in attracting tokens?

As is known, there is a link between TRX, UST and LUNA, as well as USDD. With this move, Tron DAO will prevent short sellers from filling the TRX price. If they can cause a steep drop in TRX, the token will not be valuable enough to honor USDD redemptions.

The idea behind this strategy is to reduce the supply of TRX circulating on the stock exchange. Therefore, short sellers have to pay a higher fee to short the asset. The price of the asset should theoretically rise again as sellers run out of bullets and the selling pressure eases.

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Against this backdrop, TRON DAO Reserve transferred USDC 100 million to Binance to purchase TRX. In addition to this, it has distributed an additional $ 120 million for the purchase of the token. In early June, founder Justin Sun stated that TRON DAO will tackle shorts on Binance. In this context, he noted that he will inject $ 2 billion to keep the USDD constant.

However, according to CoinMarketCap, the algorithmic stablecoin is currently trading at $ 0.9727. This is why the USDD stablecoin has not yet peged the US dollar of $ 1. As of press time, TRX is priced at $ 0.06068.

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USDD one-week chart

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