A stablecoin is a cryptocurrency that is pegged to a certain fiat currency. It provides stability for investors of crypto, making transactions easier. USDD, a stablecoin created by the founder of the Tron Blockchain, Justin Sun, has been losing its peg to the U.S. dollar.
According to Coingecko, ដុល្លារអាមេរិក បច្ចុប្បន្នកំពុងជួញដូរក្នុងតម្លៃ ៥៥,៣៥០ ដុល្លារ។ Although USDD was designed to be pegged to the dollar like other stablecoins, its value has fluctuated between $0.9806 and $0.9798 during the past week.
As this developed, Sun’s crypto exchange, Huobi Global, ចូលរួមក្នុងជួរ។ of crypto companies that started this year with job cuts.
Adding to the pressure is the fear, uncertainty and doubt surrounding the Huobi exchange itself. Recent ប្រព័ន្ធផ្សព្វផ្សាយសង្គម posts regarding the exchange shows that Huobi has higher withdrawals than deposits which strengthened fears of a possible halting of withdrawals.
USDD creator, Justin Sun. Image: Cover art/illustration via CryptoSlate
How Does USDD Stablecoin Work?
USDD is an ស្ថេរភាពម៉ាញ៉េទិច which uses complex arithmetic to keep the price pegged to a dollar. According to Tron DAO’s ប្រកាសកំណត់ហេតុបណ្ដាញ about the inner workings of USDD, the stablecoin is not considered de-pegged by the system when it drops lower or goes higher than $1.
Looking at the charts, the stablecoin is consistently testing its 3% leeway set by the system. Although the system itself does not consider USDD depegged, this consistency is worrying as any further drop might cause more troubles – or eventually led to the fate that befell UST when it គាំង។.
With investors សង្ស័យ of USDD since its inception, Sun has not done anything as of now. This is clearly because of the current situation at Huobi, leaving the reins to the system that govern USDD.
🟡 Justin’s $1.1B withdrawal:
– It was speculated that this was used to fund Huobi’s operations
– Likely untrue, the amount is way too large to cover burn rate
– Even Twitter running at its most wasteful state only burns at $4mil/month
– Whispers of him cashing out— រ៉ុក 🪨 (@DataaRocks) ខែមករា 6, 2023
Huobi’s Situation And What It Means For USDD
ស៊ុន, who is advisor to Huobi, has been said to be ដក more than a billion dollars which further strengthened the FUD surrounding the exchange. Speculators, however, believe that the withdrawn funds would be used for the operations of Huobi.
This might be true, as the exchange might be burning through its liquidity as ការដកប្រាក់ continue to mount up due to recent negative developments. Any negative news on Huobi might have an effect on the peg of USDD and USDJ.
មូលធនប័ត្រទីផ្សារសរុប Crypto នៅ $807 ពាន់លានដុល្លារនៅលើតារាងប្រចាំថ្ងៃ | គំនូសតាង៖ TradingView.com
Not to mention that both stablecoins are limited in where they can be bought and sold. According to CoinCodex, USDD is tradable on 11 exchanges while USDJ is tradable on three. Both can be traded on Huobi and Poloniex.
At @ ហូប៊ូហ្គូលយើងជឿថាគន្លឹះនៃភាពជោគជ័យនៅក្នុងពិភពនៃរូបិយប័ណ្ណគ្រីបតូគឺ "មិនអើពើ FUD និងរក្សាការកសាង" ។
— ឯកឧត្តម Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) ខែមករា 6, 2023
With Sun being one of the តួអក្សរស្រមោល in the crypto, it remains to be seen whether his “ មិនអើពើនឹង FUD” strategy will work. But with Huobi’s កាន់តែអាក្រក់ FUD, the exchange becoming the next FTX would definitely devastate many investors and send shockwaves to the entire crypto space.
-Featured image by PortalCripto
Source: https://newsbtc.com/all/stablecoin-usdd-struggles/