Famed Fox Business journalist Eleanor Terrett TRON (TRX) and USDD that investors of the stablecoin may face the same fate as Terra’s LUNA and UST cryptocurrency believes.
Tron‘s native crypto asset TRX While taking a dive, the Tron community is having a rough week as the platform’s native stablecoin USDD leaves the USD. Fox journalist Eleanor Terrett, along with the Tron community, seems to be very interested in what’s going on with TRX and USDD.
The journalist wrote in a recent tweet, specifically a few weeks ago. Terra (Luna) and, considering what happened to the UST, he noted that crypto investors are currently showing great interest in the two cryptocurrencies. UST lost its hold on the US dollar and went into freefall, taking Luna with it. Both cryptocurrencies have not recovered yet and there is a possibility that they will never return to their previous values.
Terrett pointed out that USDD has recently de-peg from USD, dropping as low as $0.94, with TRX dropping more than 20 percent in the past seven days.
ace #btc and #ETH recover slightly from their weekend lows, investors are keeping a close eye on #USDD and #TRX as some now believe they could be the next dominos to fall in a similar fashion to #TOP and #LUNA. Stablecoin USDD has depegged from the dollar, dipping as low as $0.94
— Eleanor Terrett (@EleanorTerrett) June 20, 2022
Tron spends billions on USDD Peg
Meanwhile, Tron and Tron DAO Reserve are pouring billions of dollars in collateral into the market as they try to protect the USDD stable. For this purpose, platforms have already distributed about $2 billion and more than 5 billion TRX. Despite all these efforts, USDD is still unstable.
At the time of writing, USDD is worth $0.96, TRX token It is trading at $0.059. TRX token has already lost over 20% in the past seven days. Still, although this trend can be attributed to the extreme bearish trend that swept the crypto market over the weekend, investors think there is a danger.
BTC and ETH are recovering, even as Bitcoin slumps below $18,000, its lowest level since December 2020. the same thing TRX token and it is not yet clear whether it will be in USDD as well.
Haven’t we learned from the UST incident?
According to Fox reporter Eleanor, smart investors are very wary of the current market environment, where variable assets are backed by other floating assets. It seems that claiming that an asset is a stablecoin despite its fluctuations is not a good approach to instill confidence.
The journalist also noted that an investor told him that crazy 40 percent plus annual return protocols will always be unstable:
“One investor told me: Who thought it was a good idea to back assets with other floating assets and call them stablecoins? Fundamental economics principles left at the door are always backed by insane 40 percent returns promised to be unsustainable. Literally, haven’t we learned anything as Space?”
today while TRX has dropped 20% over the past 7 days.
One investor tells me: “Who thought that backing assets with other volatile assets and calling them stablecoins was a good idea? Basic economics principles left at the door, supplemented by crazy 40%+ yields promised
— Eleanor Terrett (@EleanorTerrett) June 20, 2022
The Nightmare of Terra in the crypto market
The team behind Terra invested billions of dollars to stop the UST de-peg to no avail, and today both LUNA and UST are in a shambles with investors losing billions.
The Terra team has released a new chain instead of supporting the old chains. Name of the previous chain Terra Classic (LUNC) The new chain is now known as Terra (LUNA). Terra USD (UST) and Old LUNA (LUNAC) Investors lost billions of dollars because there were no plans to reinstate them. As a result, Terra founder Do Kwon and Terra Labs faced legal action in South Korea and the United States.
The TRON community is not wrong to worry that the same will happen as the USDD stablecoin peg is starting to lose its peg.
You can check the price movements here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.