Tron Reserve purchased at least 1,800 BTC this Saturday, following the steps of Luna with UST. The collateralization of the stable coin USDD approached 192% according to the DAO that deals with it.
Tron Reserve keeps its intention to consolidate the Decentralized USD (USDD) stable coin by acquiring bitcoin (BTC). To achieve this goal, it purchased the same amount of USD 50 million in BTC and Tron (TRX) to back up the issuance of the recently released digital asset, which keeps its parity with the US dollar.
The purchase got highlighted by the decentralized autonomous organization (DAO) Tron Reserve in a tweet. In this way, the reserves would surpass USD 700 million, although the figure of USD 669 million still makes its appearance on the official page.
The amount still includes the 14,040 BTC highlighted a week ago. Adding the USD 50 million in bitcoin purchased on Saturday, the amount would reach a peak registered at 15,836 BTC.
The amount of reserves in the stable coin Tether has changed since the last publication in this medium since it went from USD 240 million to USD 140 million.
Tron and its mission are to keep the collateralization of USDD above 130% to consolidate the stable coin as a supported token, as outlined in the white paper. This move receives the name over-collateralization.
To achieve this goal, they employ an algorithmic procedure and create a reserve that would serve only for emergencies. This reserve relies on bitcoin and other crypto-assets that allow USDD to keep parity even during unfavorable periods.
At the close of this article, the collateralization of the stable coin approached 192%, considering the situation mentioned. The current supply of USDD relies on 723,321,764 units. The first phase of the project’s roadmap, which would get enacted until October 2022, expects an issuance registered at 2,000 million USD.
Tron Acquired BTC, as Fundación Luna did with Terra
Terra, the entity that created the network of the same name and the failed stable coin terra USD (UST), also acquired bitcoins to bring assistance to its main project. However, the fall of UST and the other Terra digital asset, LUNA, could not get circumvented even with the sale of the millionaire reserves that the organization had.
The Tron model is similar to the one employed by Terra. First of all, it is also an algorithmic stable coin. This situation means that it does not count on a direct backup in other assets for its issuance, but rather it got regulated with a strong focus on algorithms that emulate the price of these.
Also, USDD got issued from the burning of TRX. The same thing happened with UST, which was broadcast by burning LUNA. The reserves, handled by Fundación Luna and Tron Reserve, include both bitcoin and other crypto actives to circumvent the loss of parity of the stable coin at times of excessive sales pressure.
By: Jenson Nuñez
