The crypto community is speculating about a repeat of the stablecoin crisis with the UST seven months ago. Concerns are growing for some altcoin projects after LUNA, CEL, FTX.
After LUNA, CEL and FTX, now this altcoin is in the midst of speculation
USDD, the stablecoin of Tron co-founded by Justin Sun, lost its dollar peg last Wednesday. On Twitter, @Lookonchain claimed that $548 million of the $990 million in USDD’s reserve was lost. They showed transactions proving that USDD founder Justin Sun transferred $550 million from stablecoin reserve to three different addresses for loan repayment.
https://twitter.com/lookonchain/status/1591983544746020864
Currently, only 442 million USDC tokens remain in total USDD reserves. $332 of this has already been distributed as credits. As a result, the total available funds in USDD are 139 million USDC and 14,040.6 Bitcoins.
However, as shown in the image above, 99% of TRX tokens in USDD reserve remained stable. This means that the collateral ratio of the USDD stablecoin reserve is only 50%. Also, Blockchain data shows that the USDD founder has withdrawn $170 million worth of stablecoins from Binance to Circle. In particular, USDD is trading at $0.9863 instead of the supposed $1 price.
According to reports, the UST algorithmic stablecoin lost its dollar peg seven months ago after some bad actors created massive imbalances in the liquidity pool of the coin and three others. Later, UST’s sister cryptocurrency, LUNA, crashed from $119.18 to $0.00001675 in six weeks.
FTX bankruptcy precipitates USDD crisis
As you follow on Kriptokoin.com, USDD price dropped below $1 in the midst of the FTX crash. In fact, USDD lost its stability after the whale wallet starting with 0x3f34 exchanged 4,495,446 USDD at $0.9935 for 4,466,269 USDT. A few hours later, another whale, 0x3155, traded 6,653,731 USDD for 6,519,662 USDC at $0.9799.
https://twitter.com/lookonchain/status/1590562917745070080
When USDD first started de-pegging, Tron founder Justin Sun thought it might be due to Alameda Research in the midst of the crisis selling its USDD reserves to combat the liquidity crisis in FTX.
Justin Sun carried $6M stablecoin before FTX-Alameda bankruptcy
The Tron founder moved $6.1 million in stablecoins from TrueFi prior to the FTX-Alameda bankruptcy. Transaction data on Blockchain shows Sun withdrawing funds in four transactions processed on Thursday:
- 2.4 million USDT from the four available loan pools in the lending protocol;
- 2.1 million USDC;
- 1 million USD TUSD;
- It carried 673,000 USD BUSD.
According to DefiLlama, TVL on TrueFi has hit recent lows as crypto borrowing appetite waned. It fell to $32 million from $544 million six months ago.
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