The price of TRX benefitted from a committed move by the TRON DAO to shield its USDD stablecoin from collapsING following the recent dip.
The TRON network’s native TRX token surged 27% in the last 24 hours as the DAO spent $220 million to buy more TRX. In a recent tweet, TRON DAO said it initially sent over $120 million worth of USD Coin (USDC) to Binance. The DAO bought TRX to induce buying pressure among traders. In a separate tweet, the DAO revealed that it sent an additional $100 million towards the purchase.
The recent TRX surge is also coming as TRON stablecoin Decentralized USD (USDD) moves closer to its intended $1 peg.
TRON’s TRX climbed past 6 cents during the Asian pre-trading session before eventually slipping into a brief sell-off as of press time. Before this, TRX had traded at 4 cents during the European session on Wednesday, while futures tracking the crypto saw $8 million in liquidations. This represents one of the highest rates among major digital currencies. Meanwhile, TRON founder Justin Sun has injected more than $2 billion this week to prop up the TRON market. Commenting on the TRX short-sell, Sun posted a tweet.
Funding rate of shorting #TRX on @binance is negative 500% APR. @trondaoreserve will deploy 2 billion USD to fight them. I don’t think they can last for even 24 hours. Short squeeze is coming. pic.twitter.com/VRExM6UK70
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 13, 2022
Before Sun’s capital injection, funding rates by traders to short or bet against TRX futures were at a staggering 500%.
TRON DAO Injection Comes amid Larger Crypto Market with TRX, BTX, and ETH Climbing
On another front, additional demand for TRX was markedly higher as traders sought to bring USDD back to its peg. The stablecoin had dropped to 91 cents owing to contagion risks in the crypto market as well as the weak macroeconomic sentiment. Now, the desire to bring USDD back to its dollar parity also comes amid renewed positive optics in the digital assets marketplace. The effort is also happening along with a broader market run which saw Bitcoin (BTC) and Ethereum (ETH) rise by more than 6.3% and 11%, respectively. Furthermore, the price surge of the popular digital currencies occurred within the last 24 hours.
Meanwhile, in an earlier tweet from Tuesday, TRON also stated that it had plowed $650 million of USDC into its reserve to “safeguard” the crypto market.
To safeguard the overall blockchain industry and crypto market, TRON DAO Reserve have increased 650,000,000 #USDC supply on #TRON. Currently USDC supply on TRON has reached $2.5 billion.
— TRON DAO Reserve (@trondaoreserve) June 13, 2022
The recent TRON DAO moves suggest that the network is doing whatever it can to avert a repeat of the TerraUSD collapse. In a recent interview session, Sun touched on USDD’s over-collateralization in relation to the TerraUSD implosion, saying:
“This has been in the plan, but Terra/Luna definitely accelerated and prioritized this for our team. We want to have USDD to be overcollateralized, which I think will make market participants more comfortable about using us in the future.”
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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