TRON’s algorithmic stablecoin USDD de-pegging got no respite despite withdrawals from Huobi slowed down on the weekend, Nansen data showed.
The crypto exchange was in the limelight following the revelation of cutting down its workforce by 20%. As reported by TronWeekly, Justin Sun, the founder of TRON and a Huobi adviser, finally acknowledged Huobi layoffs in a text message to Reuters after days of denying them.
Its native token, TRX slid down by over 10% in a span of just 2 days and is currently trading at $0.054.
Soon Huobi customers began withdrawing to the tune of over $60 million in just 24 hour period and have surpassed $94 million.
After declaring that the exchange was firing staff, TRON founder Justin Sun moved $100 million worth of his stablecoins to his cryptocurrency exchange Huobi as a trust-building measure.
A closer look into data from Nansen revealed that the funds were moved from Binance to Huobi, where Sun owns a controlling share.
The money was distributed using Tether and USD Coin [USDC] [USDT]. Sun stated that he sent the “personal funds” to demonstrate confidence in the Huobi exchange in a later statement.
Martin Lee, a Nansen analyst, commented that the move “might be to help with the increased withdrawals or maintain a level of confidence in the exchange.”
By the middle of January 8, the rate of withdrawals had fallen to a little under $12 million compared to the previous day, according to Nansen data, demonstrating the impact of the steps taken to increase trust. Weekly withdrawals were down to $84 million from Friday’s $94.2 million total.
TRON’s USDD Price Is Still Down By 97 Cents
The price of Tron’s USDD, which is meant to be tethered to the value of the dollar like other stablecoins, has shifted between $0.983 and $0.972 over the course of the last week, though. It cost $0.977 at the time this article was being written.
In contrast to Tether and USD Coin, Tron’s USDD is an algorithmic stablecoin that relies on trading incentives and collateralized storage of crypto assets to maintain its price.
Algorithmic stablecoins came under scrutiny from the general public after Terra’s stablecoin, UST, unexpectedly dropped and lost $40 billion in value last year.