It turned out that the Tron DAO reserve will buy Bitcoin (BTC) and Tron (TRX) worth $ 100 million as reserves. This plan was revealed through a tweet from Tron founder Justin Sun. Here are the details…
TRON’s tweet by Justin Sun announced the new plans
TRON is one of the largest Blockchain networks in the industry. It was founded by Justin Sun, a hugely popular cryptocurrency figure player known for his marketing. TRX is the local cryptocurrency used in TRON, as we have also reported as Kriptokoin.com. The ecosystem also has a stablecoin, USDD. USDD is created by TRON DAO as a stable payment currency. The TRON DAO’s reserve oversees all stablecoins on the TRONBlockchain and manages the native TRON USDD stablecoin.
Stablecoins, normally volatility and cryptocurrencies created to withstand price fluctuations that will sometimes result in loss of liquidity to other cryptocurrencies. A recent tweet by Justin Sun reveals that TRON plans to purchase $100 million worth of Bitcoin and TRX to be used as a reserve to stabilize USDD. This will happen through the provision of TRX and BTC reserves as collateral. Therefore, algorithmic formulas are used to control supply and demand. TRON moved 100 million USDT to the Binance exchange for this purpose.
Tron DAO reserve mobilized USDT reserve to buy more BTC and TRX as reserve.
Why did TRON choose such a path?
It wasn’t immediately clear what triggered TRON’s move, but given the recent collapse of UST, a stable cryptocurrency created by Terra, other companies’ stablecoins like TRON, in this case USDD, suffer a similar fate. It’s not surprising that he wanted to take precautions to protect himself from being confronted. As Cryptokoin.com previously reported, on May 10, Tron DAO purchased 600 million TRX and 500 Bitcoins for an average of $31,000 and $45.6 million for over $15 million. Overall, TronDao has spent more than $60 million maintaining its reserves.
At the time of this writing, the USDD is trading at a flat price of $1, with little change. TRX is trading at a decent price of $0.08, down about 4% over the 24-hour period. The Bitcoin market has been volatile lately, swinging between $29k and $31.5k. However, a $100 million purchase could set it in motion and possibly affect the price, according to experts. However, the amount remains small compared to the larger BTC market.
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