TRON DAO Reserve Will Withdraw An Additional 3 Billion TRX To Protect USD Peg
The TRON DAO Reserve aims to remove considerable volumes of TRX from trading platforms for the second consecutive day.
TRON DAO Reserve is preparing to withdraw an additional 3 billion TRX tokens from a centralised exchange and decentralised finance (DeFi) lending protocol to avoid a repeat of Terra’s UST failure.
Thursday, the charity announced the news through Twitter (June 16, 2022). However, the DAO did not specify which CeFi and DeFi systems would be used for withdrawals.
With the most recent declaration, the foundation plans to withdraw a total of 5,500,000,000 TRX. As was the case with Terra’s UST stablecoin, the planned withdrawals are designed to reduce liquidity for short traders and prevent a collapse.
In addition, the move will prevent short-sellers from driving down the price of TRX, since the token is used to redeem USD for UST, much as LUNA. If they can force the price of TRX to plummet, the currency will no longer be valued enough to redeem for USD.
The TRON DAO Reserve sent $100 million USDC to Binance for the purchase of TRX and then spent an additional $120 million to acquire the token. Earlier in June, Sun said that TRON DAO will infuse $2 billion to combat short positions on Binance and safeguard the USDD peg.
According to CoinGecko, USDD has failed to achieve parity with the U.S. dollar, as the algorithmic stable coin is presently trading at $0.97. In contrast, the price of TRX is $0.060.