In a strategic shift that has the crypto world buzzing, Tron DAO Reserve has made a significant decision to reduce its Bitcoin reserves backing the USDD stablecoin, reallocating those assets into HTX coin. This move has sparked intrigue and concern among industry observers, especially as the USDD’s dollar peg experiences minor volatility, dipping 0.17% to $0.9989 as of press time.
Bitcoin Reserves Shrinking, HTX Coin Rising
According to data from Arkham Intelligence, the Tron DAO Reserve has transferred 4,000 Bitcoin to HTX over the past three days. This is part of a broader trend where, over the last year, Tron has reduced its Bitcoin reserves by 42%, leaving 8,000 BTC still in its coffers.
Despite this reduction, the USDD stablecoin remains heavily collateralized. With a current supply of 745 million, it boasts a collateral value of $1.723 billion. Notably, nearly 99% of this collateral is backed by Tron’s native cryptocurrency, TRX, with a total of 10.93 million TRX supporting the stablecoin.
Justin Sun’s Vision for USDD and DeFi
Tron’s founder, Justin Sun, has been vocal about the rationale behind this move, drawing comparisons between USDD and MakerDAO’s DAI. Sun emphasized that USDD operates on a collateralization model that allows for the free withdrawal of assets whenever collateral exceeds a specific threshold, typically between 120%-150%. However, if the collateral dips below 110%, additional collateral is added to prevent liquidation. “This is part of the basics of DeFi 101,” Sun explained.
Currently, USDD’s collateralization rate exceeds 300%, a figure that highlights its low capital efficiency. Sun has expressed plans to upgrade the stablecoin to enhance its competitiveness in the decentralized finance (DeFi) market, underscoring Tron’s role as a stronghold for stablecoins.
TRX on the Rise Amid Memecoin Mania
Meanwhile, Tron’s native TRX token has been gaining momentum, buoyed by a surge in network activity fueled by the memecoin craze on the Tron blockchain. TRX has seen a 19% gain on the weekly chart, positioning it in a close battle with Cardano’s ADA for the tenth spot in the market capitalization rankings. Currently trading around $0.1548 with a market cap of $13.45 billion, TRX is eyeing a potential return to its all-time high of $0.20.
Also Read: Cardano vs. Tron – The Battle For The 10th Spot Heats Up
The memecoin frenzy, particularly on Tron’s SunPump platform, has also contributed to a significant increase in the network’s daily revenue. Justin Sun has set an ambitious target of $4 billion in revenue for the coming year, with plans to burn $1 billion of that while allocating $2 billion to stakers and covering transaction fees.
Tron DAO Reserve’s decision to shift Bitcoin reserves into HTX coin marks a pivotal moment for the USDD stablecoin and the broader Tron ecosystem. As the market watches closely, Tron’s strategy under Justin Sun’s leadership continues to evolve, potentially reshaping the dynamics of stablecoins and DeFi in the crypto industry.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
