Tron's Stablecoin loses its peg to the dollar. Will it be the next MOON?

USDD, the stablecoin of the Tron ecosystem, lost its peg to the US dollar, causing many investors to fear the worst. The coin has somewhat recovered from falling to one quotation of $ 0,97, but many investors are still worried. The leadership of the DAO Tron continues to expend resources in an attempt to avoid the same fate that happened to LUNA just a month ago. Will USDD rise to the surface or drown in waters?

The fall of the MOON

USDD has many similarities to another digital currency that made headlines last month, LUNA. As a stablecoin, these tokens try to maintain a value equal to that of the US dollar. Last month, LUNA suffered a USDD-like price drop, but then recovered quickly and dropped to sunk lows. Many fear that history is repeating itself with the USDD, expecting the currency's recovery to be short-lived. These predictions may be correct as USDD currently stands at just over $ 0,98. Tron's DAO is moving to ensure that the stablecoin is backed by sufficient guarantees to avoid becoming the next MOON.

Tron's purchases

In an attempt to bail out USDD, the DAO Tron would have bought over 900 million USDC, adding 650 million to the reserve as collateral for USDD. The DAO's plan is to make USDD hyper-collateralized to make investors more confident in the stablecoin. With the DAO also earmarked $ 2 billion to prevent TRX shorting, the network appears to be fighting on two financial fronts. If his strategy pays off, the DAO Tron will have proven to be more capable of surviving than Earth was. If Tron fails to stop shorting and USDD continues to fall, the Tron blockchain could face a bumpy path.

Conclusions

USDD has lost its peg to the US dollar and many fear this could be the beginning of the end for the stablecoin. As USDD shows many of the signs LUNA showed prior to its collapse, investors are concerned about the fate of this type of cryptocurrency. The leadership of Tron DAO, however, has not abandoned the USDD and is making large investments to increase the collateral of the coin. The coin doesn't need to catch up much ground to recover its peg, but with so many factors fighting it, the USDD has the potential to fall as LUNA did. Only time will tell if history will repeat itself or if USDD is stronger than LUNA.