TronDAO representatives clarified things as USDD prices on exchanges are falling again
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- No, USDD is not de-pegged
- Cooperation with CEX and DEX is in sight
TronDAO shared a Q&A on the state of reserves backing USDD and its future plans for activities needed to keep its liquidity ecosystem healthy.
No, USDD is not de-pegged
On their official Twitter account, TronDAO representatives highlighted that a drop in USDD valuation below $0.97 should not be interpreted as a de-peg.
(1/8) About Q&A #USDD
1. Is USDD depegged?
No, USDD is a decentralized stablecoin that relies on an on-chain mechanism and collateralized assets, in contrast to the former centralized stablecoin from USDC, which is tied to USD in a very close spread by banking mints and redemptions .
— Tron DAO Reserve (@trondaoreserve) June 17, 2022
Such volatility is inevitable due to market volatility, as USDD is a decentralized stablecoin that is not backed by banking mints and redemption balances. As such, a market volatility rate of around 3% is acceptable for this product.
Following the recent injection, USDD has almost become the most collateralized decentralized stablecoin in the Web3 segment. Currently, it is backed by a liquidity pool of 1,080,000,000 USDC; 10,874,566,176 TRX; 14,040.6 BTC and 140,013,886 USDT.
As such, the USDD collateralization rate is over 320%, as previously covered by U.Today. Meanwhile, some USDD and TRX positions were liquidated amid volatility spikes.
Cooperation with CEX and DEX is in sight
Today, June 18th, 2022, USDD price jumped to $0.98 and then fell below $0.965. Trondao stressed that the Tron DAO reserve has a “very healthy” balance sheet despite such volatility.
The USDD pool on the Sun.io DeFi protocol has over $200 million in liquidity, which is more than enough for its normal operation.
Therefore, TronDAO is going to forge new partnerships with both centralized and decentralized cryptocurrency trading services, says its team.