Algorithmic Stablecoin USDD Loses Its Peg

[amberrrr789]

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The algorithmic decentralized stablecoin USDD lost its peg to the dollar after FTX's death on December 12, 2022. As a result of FTX's decline, investor confidence is slipping and market anxiety is progressively building.

Earlier morning, the Justin Sun-founded stablecoin USDD dropped to $0.9693, its lowest point since June 2022. The decline exceeded the DAO's 3% cap on price fluctuations. The requirement that price changes qualify as a de-peg is met by this. After the FTX issue, USDD last month veered from its 1:1 exchange rate with the US Dollar. A transient dip is also seen in other stablecoins like USDT and USDC before they swiftly recoup their pegs.

While USDD saw prolonged fluctuation. The stablecoin's dominance % in the USDD/2CRV liquidity pool has increased, causing this shift. Unfortunately, the pool's total $34.5 million in liquidity was made up of 86% USDD, up from 80% on November 10, 2022. Users are switching out USDD for other pool components as a result of this large imbalance. In truth, it much exceeds DAI, USDC, and USDT.

The Quick Fix for USDD by Justin Sun
Justin Sun made the hasty decision to stabilize the markets and boost investor confidence following the decline. On Twitter, he stated his intention to trade roughly $773,000 worth of USD. The transaction data that Sun produced showed that he had traded $203,000 in USDC and more than $570,000 in USDT. He also tweeted, "Deploying more capital - steady fellas," repeating what Terra CEO Do Kwon had said immediately before Terra's demise in May.

He stressed the fact that the USDD's collateral ratio is higher than 200%. The future of the stablecoin is now worrying the cryptocurrency community. Investors are left wondering why its computing process is the same as the UST and why it is unable to recover its peg. Will stablecoin be the next cryptocurrency to crash? The USDD is now trading just under $0.98. It is also the eighth-largest stablecoin with a fully diluted market value of $709,060,326 and a 24-hour trading volume of $77,620,641.

Final Reflections
Tron's website states that the network is currently worth $825 million. However, the community regards them as a potential cautionary indicator. There cannot be another devastating meltdown in the market for cryptocurrencies today. We can only hope that nothing terrible happens that could destabilize the market.

[Citysatoshi]

The FTX stable coin, the ust coin has being causing a lot of panic on the cryptocurrency community and any further collapse of another stable coin will greatly throw the crypto market into complete crash that may bring a big heavy doubt on the crypto and the technology. I think the quick response Justin Sun will put up an immediate solution that avert any further damage to the network.

[Ghozrd]

The UST deppeging algorithm in Terra Luna has failed to keep the UST price stable, if the algorithm is used in some other stablecoins the same thing will happen, therefore USDT is always monitored by financial institutions in order to be able to prove the amount of dollars and real assets owned so that the ratio 1:1 with USD really exists.