As we can see on the market Almost all the coins are down by 20-80% even Bitcoin itself the largest player of crypto market is down by 20%, Tron(TRX) is holding a strong position in the market.
Whats the indication here? Is it going to sky-rocket soon or going to dump in the ground? 👀
Let's dive a bit on Tron.
Tron is pumping bit by bit regularly and have became the 13th largest crypto-currency by Coinmarket caps data.
The main reason holding here is the new algorithomic stable coin USDD backed on Tron.
USDD is basically an algorithmic stable coin follows the same ideology of UST. Here one can burn TRX and Mint USDD. that means if anyone burns TRX worth of 1 dollar then USDD worth of 1 dollar can be minted.
If we look at the market cap of USDD the market-cap (total minted value) is nearly 700 million dollar!!!
It started just a few days before the LUNA dump.
As the LUNA starts to dump the mcap of USDD starts to grow. It was kinda wierd to me.
USDD is giving nearly 30%+ APY on stake!!!
Thats insane. But the point is why would a stable coin give such an insane amount of APY??? Where, if we put an amount on a regular bank the APY is only 4-8%. Sounds a bit fishy huh?
The main idea is there are influencing more and more people to mint USDD and stake them and add liquidity on USDD-USDT pool. As a result USDD mcap is increasing and TRX is being burned which is reducing the supply of TRX from market resulting the holding of price of TRX.
If we see the burn and mint chart on Tronscan we can see that TRX were used to mint a lot on past but nowdays due to USDD TRX is burning at an insane rate.
In TRX dao we can see that to protect the eco-system of USDD they are buying different crypto-currencuies to backup the USDD.
Total amount of reserve currently they are holding is now 14k BTC, 140 million USDT, 190 million dollar worth of TRX maing a total of 716 million dollars.
But the main trick here is USDT and USDC are directly backed by USD but incase of USDD if we see, the backed ammount is Bitcoin and Trx.
So if it happens like LUNA then they can't hold their collateral in this case.
All of the above mentioned infos were collected from internet and my personal opinion will be to stay away from USDD. But to be noted it is my personal opinion and not a financial advise.