With Terra getting in the news in the past several days for its failing stablecoin, Justin Sun reassured that the TRON DAO Reserve plans to allocate $2 billion to fight potential attacks against TRX, which seems to be the next target after LUNA.
- In the past week or so, all eyes in and outside the crypto community have been on Terra and its two native cryptocurrencies – LUNA and UST. As Crypto Potato summarized earlier, UST, a stablecoin supposed to be pegged 1:1 with the USD, lost that peg, and its price dumped to a low of $0.2 on Binance.
- Since it’s an algorithmic stablecoin with new tokens issued when users burn LUNA and vice-versa, this massive crash allowed speculators to capitalize on the situation by arbitraging.
- This led to a mind-blowing price drop for LUNA, which as of writing these lines, trades at $1.15. This means that the token has lost roughly 98% of its value in less than a week.
- Due to some similarities in how the stablecoins of Terra and TRON work (both being algorithmic), Justin Sun warned that his project could be the next target of similar attacks.
- He took it to Twitter to outline the potential threat, saying that the funding rate of shorting TRX on Binance has exceeded 100% APR, later updating that percentage has gone to nearly 400.
- However, Sun reassured that the TRON DAO Reserve plans to deploy $2 billion to fight against something similar happening to his project as it did with Terra.
- Sun also noted that USDD (unlike UST) has remained “very stable” amid the latest market volatility. Additionally, he said USDD has a total market cap of $271 million, while the TRON DAO Reserve holds $10 billion.
— H.E. Justin Sun (@justinsuntron) May 11, 2022