Another 3 billion TRX being removed from exchanges by Tron DAO.
The Reserve's decision to dry up TRX's liquidity comes as USDD fell to as low as 91 cents this week , continuing to trade under a dollar for a fourth straight day. USDD is an algorithmic stablecoin on Tron and relies on an automated balancing mechanism that involves minting, or burning, of $1 worth of TRX to create 1 USDD.
The Tron DAO Reserve will pull another 3 billion TRX (worth about $180 million) from crypto exchanges to support the price of Decentralized USD, the stablecoin known by its ticker USDD. The information from a tweet on Thursday, the Tron DAO Reserve claimed that withdrawing tron (TRX) tokens from unnamed centralized and decentralized exchanges back to its own control will "safeguard the overall blockchain industry and crypto market."
Earlier this week, Tron founder Justin Sun deployed over $2 billion as traders seemed to short TRX. Funding rates – or the interest paid by traders to borrow capital for a trade – to short, or bet against, TRX futures reached a whopping 500%. Sun said the capital was intended to “fight them.”
Following this latest withdrawal, the DAO Reserve will have pulled 5.5 billion TRX from exchanges in two days, or nearly 6% of its total circulating supply. Withdrawing a token from exchanges is a highly unusual step, although controlling liquidity in this way can limit the ability of short sellers to bet against tron. It also ensures the Tron DAO can maintain a large reserve of tron, with which to redeem USDD holders looking to sell.
TronDAO, a decentralized autonomous organization (DAO) that oversees development on Tron, said in a Wednesday tweet that it sent over $120 million worth of USD coin (USDC) to Binance to “purchase TRX,” creating buying pressure among traders. The DAO later sent another $100 million for the TRX purchase, it said in a separate tweet. Tron’s TRX token rose as much as 27% in the past 24 hours as its ecosystem stablecoin decentralized USD (USDD) inched closer to its intended $1 peg.
The continuing effort by the TronDAO, alongside founder Justin Sun to hold the Tron token and stablecoin USDD is showing no signs of stopping anytime soon, also by supporting the blockchain industry’s “stability” as well . The other big issues coming to fruition like the 3 Arrows Capital team possible illiquidity and Celsius freezing people’s assets are making it seem the downside isn’t completely finished yet.
