Jun 13, 2022 at 07:06TRON founder Justin Sun has announced that the TRON DAO will deploy $2 billion to protect TRX from the funding rate of shorting it on Binance. According to his tweet, this ratio is already negative 500%. Here is what else is known.
LUNA’s scenario?
Many users have noticed that Sun’s TRON DAO’s plans are similar to what was happening to LUNA before its collapse. However, to avoid a possible LUNA scenario and protect the USDD peg, the company has already injected $800 million USDC (algorithmic Stablecoin that works by burning TRX to keep its dollar parity) in TRON DAO’s reserve.
“Funding rate of shorting TRX on Binance is negative 500% APR. TRON DAO will deploy $2 billion to fight them. I don’t think they can last for even 24 hours”, —Justin Sun’s tweet says.
Also, he has warned that a short squeeze is coming. It is a term used to describe a phenomenon in financial markets where a sharp rise in the price of an asset forces traders who previously sold short to close out their positions.
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To protect the USDD peg, the company has taken an approach of over-collateralizing USDD at a scale of 1 to 1,3 by acquiring various assets such as BTC, TRX, and stablecoins such as USDC, USDT, TUSD, and USDJ.
According to the official website, the collateralization ratio of USDD is currently 280%. And the algorithmic stablecoin’s USD value has dropped to $0.98.
Do you think the TRX will meet the same future as the Luna?
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