USDD is an algorithmic-based stablecoin that is pegged 1:1 with the US Dollar. Although, USDD has been trading under $1 for 5 days.
- In a tweet from the TronDao Reserve which backs USDD, they state that USDD is not depegged from the US Dollar as certain percentages of volatility are unavoidable.
- The reserve states that with current market volatility, percentage changes of 3%-+ are an “acceptable range”. Although with the current price of USDD, it is at a 3.27% decrease from its peg.
- According to the reserve, the reason for trading below $1 comes from “extreme market conditions”, where traders have been liquidated and large shorts on both TRX and USDD have been accumulated for profit.
- Despite the extreme market conditions, the reserve claims that they have a very healthy balance sheet with a collateralization rate of 320%. The reserve will be watching the market very closely and acting accordingly.
See Related: USDD Algorithmic Stablecoin Remains Depegged After Two Days