The USD Will Soon Collapse – Report
Last month’s unexpected devaluation of terra’s USDT assets left a bitter taste in the mouths among several traders. Tron, however, introduced its stablecoin (the USDD) in the same month.
The USDD Struggles To Maintain Its Dollar Peg.
However, the USDD debut has been followed by controversy after controversy. The USDD remains unable to retain its 1:1 parity with the USD. Presently, it trades for $0.9863, as per statistics from Coinmarketcap.
However, Justin Sun, the founder of Tron, has repeatedly stated that the USDD would not collapse. He asserts that the Tron DAO has taken sufficient precautions to prevent the USDD from enduring the same fate as the UST.
Sun emphasized that the USDD stablecoin has excessive collateral backing. In addition, the Tron DAO reserve would take the necessary precautions to avoid a de-peg. Nevertheless, Sun’s remarks have not results obtained were compared with sufficient assurance. Many are concerned that the USDD would suffer the same fate as the USD. Their fears are progressively coming true as the USDD tries to keep its linkage to the US dollar.
The Tron DAO reserve claims to own a reserve of $2B worth of BTC, USDC, and TRX to deploy where necessary. The DAO has also spent $10m to purchase TRX and USDD. However, analysts estimate that the Tron DAO’s reserve may not be enough to maintain the USDD’s peg.
A USDD Investigation Confirms Investors’ Fears
A self-titled crypto detective, Coffeezilla on Twitter, has revealed a report of his investigation into Justin Sun’s USDD. Coffeezilla believes that the USDD will soon go the way of UST. Cofeezilla explained the results of its findings in a new YouTube video. The investigator said the USDD’s market cap of $723m is enough to make it a decentralized algorithmic stablecoin.
Coffeezilla contends that the USDD’s design resembles that of the LUNA/UST. Users are required to burn Tron and manufacture USDD. He stated that the sole distinction is that there is no method to exchange USDD for TRX and only organizations on the white list can manufacture USD.
The USDD’s design prevents consider the cost from causing enormous price fluctuation and a probable collapse. Nonetheless, the coin’s design renders it an insecure optimization algorithms token. Coffeezilla asserts that it is unlikely that the Tron DAO reserve will use USDD collateral to reestablish its peg when required.
“Justin Sun uses the USD as a money making scam to betray retail traders.” The crypto investigator asserts that Justin Sun presumably controls the bitcoin wallet associated with the Tron DAO reserve. Consequently, he may have converted it into his personal property.
The existence of this wallet predates two years. Coffeezilla asserts that USDD is not decentralized because Sun has created roughly 94% of its circulating supply.