The current bloodbath in the crypto market saw most assets exploring colossal sell-offs. Bitcoin and alts witnessed heavy liquidations, losing millions per day. Indeed, the crypto world has been battling to escape the death spiral triggered by funds outflow and inflation numbers. Meanwhile, even stablecoins are experiencing the heat, with some losing their $1 peg following heavy selling strength.
No Longer Stable
Stablecoins Tron and BTC-backed USDD and WAVES-supported Neutrino USD (USDN) extended their downtrends at this publication, sliding from the crucial $1 mark. Tron’s new stablecoin, USDD, might be heading into trouble months following its launch.
While publishing this content, USDD explored another 0.8% decline, trading near the $0.98 level. The USDD de-pegging has added to the surging fear factor within the crypto world.
The sinking TRON and its stablecoin dragged the DeFi TVL to $63 billion, exploring the lowest value since April last year. Neutrino USDD, an algorithmic stablecoin within the Waves blockchain, also lost the US dollar tie, hovering at the $0.96 low.
These developments had affected parties taking some steps to catalyze optimism amidst the bearish case. Just Sun, Tron CEO, stated that USDD manager Tron DAO actively purchases crypto, adding the reserve to the public address when the market regains stability. Moreover, the platform will refresh the USDD return rate each day.
The past hour had TronDAO and Sun announcing another 650 million USDC purchase, totaling $2.5B. Also, Neutron planned to put a portion of its collateral in the marketplace to heighten the stablecoin’s valuation.
The de-pegging confirmed market players are moving their money to different asset classes, like derivatives. Speculations and fear around stablecoins following the UST crisis increased in the market. UST-LUNA, an algo token like USDD, plummeted to wipe out $18B off the crypto space. The crash emerged after the coin failed to keep its dollar tie, crashing to 35 cents on May 9.
Similarly, LUNA founder Do Kwon declared a $10 billion BTC buy to back UST stability. The plan was unsuccessful. UST crash affected global investors, either indirectly or directly.
Therefore, the latest scenarios had South Korea’s leading exchange, Upbit, warning about potential risks to TRON and WAVES amid the USDD and USDN’s de-peg. Investors in South Korea incurred massive losses due to the Terra debacle, and exchanges have never been more cautious.