Tron DAO loses Bitcoin backing, Justin Sun cites 300% collateralization as the reason
The post Tron DAO loses Bitcoin backing, Justin Sun cites 300% collateralization as the reason appeared on BitcoinEthereumNews.com.
The Tron DAO Reserve moved out 12,000 BTC worth around $730 million at press time. Tron founder Justin Sun noted the over-collateralization of Decentralized USD (USDD) as the reason for the withdrawal. The Reserve is in place to stabilize the Tron network, the USDD stablecoin, and the broader crypto market. Before BTC was moved out from the Reserve, its collateralization rate was of 300%. Tron Reserve moves 12000 Bitcoin 12,000 BTC, having a market value of close to $730 million at press time, was moved out of Tron DAO Reserve. The Bitcoin reserve was backing the Tron-based USDD stablecoin. However, Arkham intelligence finds that the BTC moved to HTX. At press time, the centralized exchange shows a balance of close to 8,000 BTC, valued at under $500 million. The Tron DAO Reserve by the TRON network aims to safeguard against panic trading and market downturns. At the time of writing, the total market cap of Tron-based stablecoins, which includes USDT, USDC, TUSD, USDJ, and USDD, stands at over $62 billion. Out of this, the USDD supply is around $745 million. BTC balance with HTX | Image: Arkham Intelligence Notably, the Tron Reserve stabilizes exchange rates of both centralized and decentralized stablecoins. And the removal of a large amount of Bitcoin has left the market curious. Meanwhile, Justin Sun has compared the mechanism of Decentralized USD (USDD) to MakerDAO’s DAI, calling the market reaction “not mysterious.” Over-collateralization leads to USDD removal Tron founder Justin Sun wrote, “When your collateral exceeds the amount specified by the system (usually between 120%-150% depending on the vault), any collateral holder can withdraw any amount freely without anyone’s approval.” USDD is a decentralized stablecoin. To put it simply, USDD holders have put up some collateral to back up the value of the stablecoin and keep it steady.…
Filed under: News - @ August 23, 2024 5:16 am