Robert Steinadler, a year ago
Last week had been particularly hard for tech stocks and crypto alike. The Nasdaq 100 took a hit and bears were rejoicing when they looked at the Bitcoin chart. However, not all crypto assets went down last week. Admittedly there were only a few exceptions but those that presented themselves have proven to be profitable for investors.
One of them was Tron. Why took TRX off last week instead of dumping along with the rest of the market?
Some analysts already pointed out that the success of TerraUSD will trigger some sort of competition between blockchains for the better stablecoins solution. It was in April when Justin Sun announced that Tron is entering the market with Decentralized USD (USDD).
While some spectators on social media were immediately convinced that this would be another marketing stunt that Sun is known for, the plans were real. In fact, Tron’s blockchain always had facilitated stablecoins like USDT over the last couple of years and despite its shrinking market share it always had been one of a few pillars in the Tether ecosystem.
It not only has a proven track record when it comes down to stablecoins but also has a lot of defi protocols and dApps that are running on top of Tron’s blockchain.
But these facts don’t automatically create demand for a new stablecoin. The promise of earning 30 % APY by staking USDD on the other hand absolutely does. And it seems that the market picked up on the idea that Tron could secure its market share during times when the market is considered especially weak.
It was last Tuesday when USDD became available along with the promise that the Tron DAO Reserve would backup the algorithmic stablecoin with additional crypto holdings. It seems that this has created the reason for the outstanding performance of TRX last week despite the condition that the rest of the market where facing.
Critics have pointed out that USDD is basically a copy of TerraUSD and that it carries the same risks. It remains to be seen if USDD manages to hold up itself against competition from algorithmic stablecoins and those who are backed by dollar-denominated assets. Investors can stake USDD on the Tron blockchain as well as on the Binance Smart Chain.
May 18, 2023
Stablecoin issuer Tether (USDT) in its recent reserves report reveals that the company holds approximately 52 thousand BTC, worth a respectable $1.5 billion. This is only a fraction of its total assets but signals an interesting potential trend of institutions allocating a piece of their capital to Bitcoin.
May 01, 2023
Circle, the creator of stablecoin USDC, has launched a protocol that lets users transfer USDC between Ethereum and Avalanche. It will help increase user-friendliness and remove the risk of bridge hacks.
Apr 20, 2023
Stablecoins are highly attractive. Payments can be settled within minutes and investors have access to many different currencies that they can add to their portfolios. These are only two use cases for stablecoins and judging from their overall market cap, they will not only dominate the crypto space. They have a real chance to drive mass adoption since they tokenize currencies that are demanded by billions of people worldwide. It looks like Societe Generale recognized this potential.
Mar 17, 2023
When it became clear that Circle had $3.3 billion stuck at the Silicon Valley Bank the market went wild. USDC lost its peg and was trading way below 1 US-Dollar. Bear market PTSD set in and the broader crypto media was already discussing if USDC would fail. Fortunately, things turned around shortly after the initial turmoil and Circle was made whole again. This has been a big relief for the market but needs some explanation.