Thursday, June 30, 2022
  • About
  • Privacy Policy
  • Editorial Principles
  • Why to trust us
  • Contact
Scoop Nova
  • Home
  • Business
  • Technology
  • Scandals
  • Politics
Scoop Nova
  • Home
  • Business
  • Technology
  • Scandals
  • Politics
No Result
View All Result
Scoop Nova
Home Technology

Why another stablecoin losing its peg isn’t ‘Terra 2.0’

admin by admin
June 22, 2022
in Technology
0
Why another stablecoin losing its peg isn’t ‘Terra 2.0’
585
SHARES
3.3k
VIEWS
Share on FacebookShare on Twitter

You might also like

Starz could turn into ‘acquisition machine’ after spinoff from Lionsgate

FCC commissioner tells Apple, Google to remove TikTok from app stores

Crypto hedge fund Three Arrows Capital plunges into liquidation

After the collapse of the so-called stablecoin called terraUSD, cryptocurrencies have been under immense pressure.

Umit Turhan Coskun | Nurphoto via Getty Images

The controversial stablecoin launched just before the collapse of a similar token called terraUSD USD..

USDD, the so-called “algorithm” stablecoin, meant it was always worth $ 1 and plunged to 93 cents on Sunday. The creator of the coin is Bitcoin Other digital tokens worth nearly $ 2 billion to provide a buffer for investors to flee all at once.

The situation led to fear that USDD might suffer Same fate as terraUSDAlso UST, A destroyed so-called stablecoin that formed part of an experiment called Terra. UST meltdown is a wider trigger Cryptocurrency sold outHas been getting worse in the last few weeks Increasing liquidity crisis In the market.

TronDAO Reserve, which oversees and manages Stablecoin, said the price of USDD is expected to fluctuate to some extent given the “distributed” nature of USDD.

The organization tweeted last week that “a certain percentage of volatility is inevitable.” “Currently, the market volatility rate is within ± 3%, which is acceptable. We will carefully monitor the market and act accordingly.”

USDD was trading at about 97 cents on Wednesday.

Despite concerns about Terrasaga’s repetition, experts say this is unlikely to be the case, as USDD is much smaller in size and has little uptake from crypto investors.

What is USDD?

The USDD was launched in early May, a few days before the UST started to fall below $ 1. Over the past week, it has traded below the intended dollar pegs as sales have increased.

Instead of sitting on a pile of cash and other cash-like assets, USDD runs a complex algorithm in combination with related tokens called Tron to maintain a one-to-one peg to the greenback.

If it sounds familiar, it’s Terra’s UST Almost the same wayCreate and destroy a unit of UST and a sister coin called Luna to avoid the need to have a spare to back up Stablecoin.

Another similarity that USDD shares with UST is that it is accumulating significant cash on other digital tokens in order to raise prices in case of a surge in investors.Purchased by Terra Billions of dollars worth of crypto To bring out that stablecoin Eventually proved to be useless..

When USDD uses crypto as a reserve, it is exposed to “UST-like risks,” said Monsour Hussein, senior director of Fitch Ratings’ financial institutions.

“Cryptography is generally price-correlated during times of turmoil,” he added.

USDD also offers investors an unusually high interest rate (up to 39%) on USDD deposits. Anchor, a cryptocurrency lending platform, also advertised a yield of as much as 20% on UST holdings. This is the rate that many investors say is currently unsustainable.

The coin was created by Justin Sun, a candid crypto entrepreneur behind Tron, a blockchain trying to compete with Ethereum. Like Terra’s founder, Do Kwon, Sun uses it a lot. twitter Promote his project and challenge critics.

Chinese-born businessmen have been involved in many controversial and promotional stunts in the past. In 2019 he Paid $ 4.6 million to have lunch Suddenly canceled with Berkshire Hathaway CEO Warren Buffett.Finally lunch Made in 2020..

Not another terra

However, upon closer inspection, it is clear that there are some notable differences between USDD and UST.

For one thing, USDD is far from the size of Terra. Terra’s UST and luna tokens Total value of $ 60 billion At their height. Therefore, analysts say it is unlikely that the same effect will be achieved if it collapses.

“USDD isn’t heavy enough to cause the same destruction consequences that UST did,” said Dustin Tiander, a research analyst at crypto data company Messari.

He added that the use of USDD is not as widespread as it was before the disappearance of UST.

According to public blockchain records, about 10,000 accounts hold tokens on the Tron network, while over 100 accounts hold tokens on Ethereum.

If the USDD collapses, “there will be no as much transmission or fear as when the UST / LUNA crashed,” Hussein said.

And unlike UST, Partially secured by cryptography, USDD aims for over-collateral. That is, the asset always exceeds the number of tokens in circulation.

The Tron DAO Reserve states that its reserves include over $ 1.9 billion in Bitcoin and other tokens, including Stablecoin USDC and tethers. USDD has a supply of approximately $ 700 million. According to Teander, it reduces the possibility of Terra-style collapse.

Tags: BitcoinBitcoin / USD BitstampBusiness newsCryptocurrencyDXY USD Currency IndexFinTechisntlosingMarketpegstablecointechnologyTerraTerraUSD / USD Coin Metricsthe internetTwitter Inc
Previous Post

Putin to meet leaders from countries that have not condemned Russia's invasion of Ukraine

Next Post

5 things to know before the stock market opens Wednesday, June 22

admin

admin

Related Posts

Starz could turn into ‘acquisition machine’ after spinoff from Lionsgate
Technology

Starz could turn into ‘acquisition machine’ after spinoff from Lionsgate

by admin
June 30, 2022
FCC commissioner tells Apple, Google to remove TikTok from app stores
Technology

FCC commissioner tells Apple, Google to remove TikTok from app stores

by admin
June 30, 2022
Three Arrows Capital (3AC) faces deadline to repay loans or default
Technology

Crypto hedge fund Three Arrows Capital plunges into liquidation

by admin
June 29, 2022
De Nora IPO priced at 13.50 euros per share; $2.8 billion valuation
Technology

De Nora IPO priced at 13.50 euros per share; $2.8 billion valuation

by admin
June 29, 2022
Climeworks is a carbon dioxide removal company building in Iceland
Technology

Climeworks is a carbon dioxide removal company building in Iceland

by admin
June 29, 2022
Next Post
5 things to know before the stock market opens Wednesday, June 22

5 things to know before the stock market opens Wednesday, June 22

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recommended

Biden defends abortion rights after Supreme Court draft on Roe v. Wade

Biden defends abortion rights after Supreme Court draft on Roe v. Wade

May 3, 2022
Bitcoin (BTC) falls as market focuses on Celsius issue, Fed rate hike

Bitcoin (BTC) falls as market focuses on Celsius issue, Fed rate hike

June 13, 2022

Categories

  • Business
  • Politics
  • Scandal
  • Scandals
  • Technology
  • Uncategorized

Don't miss it

Pelosi receives Communion in Vatican amid abortion debate
Politics

Pelosi receives Communion in Vatican amid abortion debate

June 30, 2022
Wells Fargo CEO says economy still not ready for big rate hikes ahead
Business

Wells Fargo CEO says economy still not ready for big rate hikes ahead

June 30, 2022
Starz could turn into ‘acquisition machine’ after spinoff from Lionsgate
Technology

Starz could turn into ‘acquisition machine’ after spinoff from Lionsgate

June 30, 2022
Judge lifts Trump contempt order in New York civil probe
Politics

Judge lifts Trump contempt order in New York civil probe

June 30, 2022
Frontier sweetens offer for Spirit merger as shareholder vote looms
Business

Frontier, JetBlue battle over Spirit Airlines goes down to the wire with competing bids

June 30, 2022
FCC commissioner tells Apple, Google to remove TikTok from app stores
Technology

FCC commissioner tells Apple, Google to remove TikTok from app stores

June 30, 2022
Scoop Nova

Scoop Nova is the only worldwide news organization with a European perspective, and it’s where the rest of the world goes to hear what the World has to say.

Categories

  • Business
  • Technology
  • Scandals
  • Politics

Quick Links

  • About Scoop Nova
  • Contact us
  • Editorial Principles
  • Why to trust us
  • Privacy Policy
  • Sitemap

Recent News

Pelosi receives Communion in Vatican amid abortion debate

Pelosi receives Communion in Vatican amid abortion debate

June 30, 2022
Wells Fargo CEO says economy still not ready for big rate hikes ahead

Wells Fargo CEO says economy still not ready for big rate hikes ahead

June 30, 2022

© Copyright 2022 ! All rights are reserved by scoopnova.com

  • Home
  • Business
  • Technology
  • Scandals
  • Politics

© Copyright 2022 ! All rights are reserved by scoopnova.com