Robert Steinadler, a year ago

Tron had a strong week despite harsh market conditions, here is why

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?

Tron enters the stablecoin wars

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.

Staking USDD for 30 % APY is a good argument

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.

Featured articles
Four trading strategies for crypto
Bitcoin and Ethereum: what are the differences?
What determines the Bitcoin price?
Related articles
Stablecoin issuer Tether has bought BTC for its reserves

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.

Trade anytime, anywhere

Boost your trading impact and reaction time in over 80+ cryptocurrencies via instant access to your portfolio with the LiteBit app.

App Store
Google Play Store
  • 2525 Ventures B.V.
  • 3014 DA Rotterdam
  • The Netherlands
More info
  • Support
Subscribe for updates

Sign up to stay informed via our email updates

Subscribe
Explore popular coins
    © 2023 LiteBit - All rights reserved