The crypto increased by more than 17 percent during the past 24 hours, jumping from $0.0755 to $0.089. The last time TRX appeared on such price level was mid of December 2022 when Tron was declining after a four-month bull run.
Launches Decentralized USD
The 43 percent weekly price spike of the TRX is mostly related to the launch of Tron network’s own stablecoin. The algorithmic stablecoin, called “Decentralized USD” or USDD, is issued today by TRON DAO with the 103,640,007 total supply.
Decentralized USD is an algorithmic stablecoin, which is pegged to the United States dollar (USD) and whose price depends on the smart contract algorithms, that track the demand for the stablecoin and adjust its supply accordingly.
This means, that when the price of USDD fluctuates, an algorithm brings it back to the target value. To push the price back to the stable levels it has to burn the USDD stablecoin and mint a Tron’s native TRX coin instead.
Reportedly, the newly issued stablecoins is USDD circulates on TRON, Ethereum, and Binance Smart Chain networks via the cross-chain protocol BitTorrent Chain.
Tron DAO plans to launch USDD’s testnet on October 10, while deadlines for releasing live network (Moon) and mainnet (Mars) are scheduled for the end of November and December 2022 accordingly.
The decentralized organization reports the $2 billion reserve to support USDD’s peg. It also revealed plans to raise the reserve to $10 billion in the future.
Copycat Accusations
TRON’s founder Justin Sun has named the newly issued USDD “the most decentralized stablecoin in human history”. However, the less biased cryptocurrency space has a different opinion. Especially on the unique features that USDD has.
According to cryptocurrency analyst Alex Krüger, Tron’s stablecoin is a copy of TerraUSD (UST). “Now TRON is copying Luna’s decentralized dollar. And faithful to its roots, the stages of the TRON stablecoin will be named Moon and Mars. Very original,” he tweeted, adding that Tron’s network itself was created by plagiarizing Ethereum whitepaper.
TerraUSD (UST), a decentralized stablecoin running on Ethereum, attempts to maintain a $1.00 value through an algorithm, that buys and sells Terra’s native governance coin LUNA. Although to buy a single algorithmic stablecoin, it has to be minted. And for this process to happen the protocol has to burn some governance coins to maintain the price balance.
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Source: Cryptocurrency - investing.com
