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Tron’s Justin Sun Believes USDD Will Be the New Settlement Currency of Crypto, Cites Lessons from UST’s Collapse

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Tron’s Justin Sun Believes USDD Will Be the New Settlement Currency of Crypto, Cites Lessons from UST’s Collapse

Summary:

  • Tron’s Justin Sun wants the new USDD stablecoin ‘to be the new settlement currency of crypto.’
  • He has stated that Tron’s USDD stablecoin will be overcollateralized.
  • Tron hosts the largest supply of stablecoins, including USDT issued on its chain.
  • Justin Sun states that USDD will learn from UST’s collapse by allowing organic growth of the stablecoin with transparent and overcollateralized reserves.
  • USDD will eventually expand to other chains.

The founder and former CEO of Tron, Justin Sun, has stated via Twitter that he wants the new USDD stablecoin ‘to be the new settlement currency of crypto.’

🌐Built on the back of #TRON’s thriving stablecoin ecosystem, #USDD will be over-#collateralized by a combination of stable and volatile assets #decentralized #stablecoin (#CDS).

🛡We want $USDD to be the new settlement currency of #crypto.https://t.co/2Au2opIMhR

— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) June 1, 2022

USDD Will be Overcollateralized

Mr. Sun also shared a letter to the Tron and USDD communities highlighting a roadmap in which the stablecoin project aims to learn from UST’s collapse. He explained that there is still potential in decentralized stablecoins, and Terra’s dramatic ascent inspired the creation of USDD.

He added that, unlike Terra, the Tron blockchain hosts the highest supply of USDT. The Tron blockchain has achieved enormous success and adoption in its DeFi ecosystem by focusing on the liquidity and adoption of stablecoins. Furthermore, USDD will be overcollateralized. He said:

USDD will be a new decentralized stablecoin fully backed by a combination of stable and volatile assets. Initially, USDD will be over-collateralized by high-quality and low-volatility assets, including USDT, USDC, and BTC.

The collateralization rate is currently in the 180-200% range. By increasing the USDD supply slowly, we will be cautious with expansion.

USDD Will Learn from TerraUSD (UST) Collapse

Moving forward, Justin Sun cited the following lessons from UST’s collapse to help in USDD’s stability.

  • Inorganic and unsustainable growth is bad – USDD will initially have a supply cap of 2 billion, which will be lifted in Phase Two using a time-based staking mechanism. Its long-term cap will further be decided by trading demand.
  • Transparent over-collateralization is critical in preventing depegging – The Tron DAO will strive to design its reserve plans such that USDD is over-collateralized by a basket of fiat-collateralized stablecoins (such as USDT and USDC) in addition to Bitcoin, Tron and other assets.

USDD will Expand to Other Chains Beyond Tron

In his concluding remarks, Justin Sun mentioned plans for USDD to expand beyond the Tron blockchain. He said:

Our aim is for USDD trading pairs to have more liquidity than USDT or USDC on both centralized and decentralized exchanges.

We want USDD to be the new settlement currency of crypto. To enable this, we will focus on liquidity, while making sure USDD has ample reserves.

As the industry moves closer to a cross-chain future, USDD will also expand to support multiple chains. We’re currently active on TRON, BNB Chain, and Ethereum, with plans to expand to many others in the near future.

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Ethereum

Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th

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Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th

Summary:

  • Sky Mavis, the parent company of Axie Infinity, expects to reimburse hack victims on June 28th.
  • The Ronin Network bridge is also expected to reopen on the same day.

The parent company and developer of the Axie Infinity Video Game, Sky Mavis, has said in a statement that it expects to reimburse all affected gamers for its March 2020 hack by June 28th. In addition, the Ronin Network bridge is also scheduled to reopen on the same date.

The team at the Ronin Network has also updated via the tweet below on the reopening of the bridge, explaining that its engineers had been hard at work preparing for it to restart.

Our engineering team has been hard at work preparing for the Bridge to re-open. Things are progressing nicely and we have some more information to share with you today: pic.twitter.com/fgFV62G3vd

— Ronin (@Ronin_Network) June 23, 2022

Reopening the Ronin Bridge Will Require a Hard-fork.

They also added that for the bridge to reopen, the Ronin network required a hardfork, as explained below.

We plan on re-opening the Ronin Bridge on June 28th, with all user funds returned.

Re-opening will require on a Ronin hard-fork which requires all validators to update their software.

Validators have been informed regarding next steps to upgrade their validating node.

Axie Infinity (AXS) Could Have Found a Short-term Bottom on the 1 Day Chart.

Concerning price action, the daily AXS/USDT chart below hints at a potential short-term bottom for the digital asset at the recent low of $11.85 set last week as Bitcoin fell to a local low of $17,600.

Sky Mavis to Reimburse Axie Infinity Hack Victims and Restart the Ronin Bridge as Early as June 28th 19

Also, from the chart, it can be observed that AXS is attempting to recapture the 50-day (white) moving average as support. The daily trade volume is also green and confirmed by the MACD’s histograms.

Additionally, the daily RSI and MFI hint at renewed buying interest that could see AXS retest $20 or even push high enough towards $25 in the following days.

However, as with all altcoins, the fate of Axie Infinity (AXS) is very much tied to that of Bitcoin. Consequently, a loss of the $20k support by Bitcoin could lead to further losses for AXS, including dipping below the $10 support level.

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Celsius Considers Bankruptcy, Hires More Advisors

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Celsius Considers Bankruptcy, Hires More Advisors

Summary:

  • The crypto lending company of Celsius is reportedly considering filing for bankruptcy.
  • Celsius has therefore hired more advisors to prepare for the potential filing.

The crypto lending company of Celsius is reportedly considering filing for bankruptcy.

According to a report by the Wall Street Journal, Celsius Network LLC has hired restructuring consultants from the advisory firm of Alvarez and Marsal to recommend a way forward on a possible bankruptcy filing.

The Wall Street Journal, citing people familiar with the matter, also pointed out that neither representatives from Celsius nor Alvarez and Marsal had responded to requests for comments.

Last week, Celsius also hired the law firm of Akin Gump Strauss Hauer & Feld LLP to advise on possible solutions for its ongoing financial woes.

Celsius had Stated it Was Working on Stabilizing Operations.

In a June 20th blog post, the Celsius team updated the crypto community on the status of the company, pointing out that their main objective was to stabilize the platform’s liquidity and operations.

The team at Celsius also informed the crypto community that stabilizing the platform would take time and they were pausing all Twitter spaces and AMAs (ask-me-anything) sessions ‘to focus on navigating these unprecedented challenges and seeking to fulfill our responsibilities to our community.’

Celsius Had Stated that it Was Committed to Meeting its Obligations.

To note is that withdrawals, swaps, and transfers on Celsius were halted on June 13th with the team citing current market conditions as the main reason for doing so. They explained:

Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

[Feature image courtesy of Celsius.Network]

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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

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Kyber Network Admits A Portion of Its Treasury Was Held By 3AC, But Not Significant to Affect KNC Operations

Summary:

  • The Kyber Network team has admitted that Three Arrows Capital’s potential insolvency might impact its treasury.
  • A small portion of Kyber Network’s treasury is with Three Arrows Capital but is not significant enough to affect the KNC project’s operations.
  • The team at Kyber Network adds that it has enough funds to operate for many years.

The potential insolvency of the Three Arrows Capital hedge fund continues to expose a web of affected crypto projects.

Yesterday, the team at Kyber Network clarified via Twitter that Three Arrows Capital held a small portion of its treasury. Therefore, as explained in the tweet below, its potential insolvency could have a small impact on Kyber Network.

3/6 3AC’s potential insolvency may have some impact on Kyber treasury as a small portion of Kyber treasury is with 3AC.

— Kyber Network (@KyberNetwork) June 23, 2022

Three Arrows Capital Had Done an OTC Deal with Kyber Treasury to Buy Some KNC.

The Twitter thread by Kyber Network explaining its connection to the potentially insolvent Three Arrows Capital starts by stating that 3AC had done an OTC deal with cyber treasury to purchase KNC. However, the amount purchased was not significant and was transferred from Three Arrows Capital receiving wallet ‘a long time ago.’

The team at Kyber Network believes that 3AC still holds the KNC, but the amount should not be part of the assets belonging to Three Arrows Capital that was liquidated earlier this month.

Kyber Networks Can Sustain Development for Many Years.

The Kyber Network team also added that the events surrounding Three Arrows Capital would not significantly impact the project’s operations as it has enough to sustain development for many years. They said:

However, we are in no way stopped by this incident as Kyber treasury can still sustain Kyber’s development for many years. We were caught off guard since our relationship & our trust in 3AC had been built up for more than 3 years. At the end of the day we are still human.

3AC Incident is A Great Learning Lesson. KNC Will Not be Laying Off Any Employees.

Furthermore, they explained that the Three Arrows Capital incident ‘is a great lesson and wake-up call for [the project]’ and that it will firm up their ‘belief in a trustless Defi ecosystem.’ The Kyber Network team also clarified that they will not be laying off any employees, as explained below.

Nothing is changed in our long term plan, we are not laying off but rather expanding the Kyber team to build the true trustless decentralized exchange in line with our long term vision. New protocol announcement is coming in the next few days.

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