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.