13 Jun Short Squeeze Coming: Justin Sun Reveals $2 Billion Injection to Save USDD Peg
Justin Sun, founder of TRON, now Permanent Representative of Grenada to the World Trade Organization (WTO), said that the TRON DAO will deploy funds to protect TRX from the funding rate of shorting it on Binance.
Justin Sun said that TRON DAO will be deploying $2 billion to fight short positions on Binance because of the funding rate.
Funding rate of shorting TRX on Binance is negative 500% APR. TRON DAO will deploy 2 billion USD to fight them. I don’t think they can last for even 24 hours. Short squeeze is coming.
Shortly after the tweet, he revealed that TRON DAO’s reserve saw injections of 800 million USDC to defend the USDD peg.
To those unaware, USDD is an algorithmic stablecoin that works by burning TRX to keep its dollar parity.
However, to avoid a possible UST-LUNA scenario, USDD has taken an approach of over-collateralizing USDD at a scale of 1 to 1.3 by acquiring various assets such as BTC, TRX, and stablecoins such as USDC, USDT, TUSD, and USDJ.
In other words, 1 USDD should always be worth $1.3, according to the team.
Meanwhile, on the official website, the collateralization ratio of USDD, which supposedly shows the stability and security of the stablecoin, is currently sitting at 280%.
Nevertheless, USDD’s peg has come under attack over the past hours as the entire cryptocurrency market was sent into shambles.
The algorithmic stablecoin’s USD value dropped to $0.98 according to data from CoinMarketCap:
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