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Tron’s TVL Rises By 40% On The Back USDD Algorithmic Stablecoin Hopes

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Tron’s TVL Rises By 40% On The Back USDD Algorithmic Stablecoin Hopes

Quick take:

  • Total value locked on Tron grew over 40% in the last 30 days.
  • It’s now the third-largest DeFi protocol with $5.92 billion in TVL.
  • Other DeFi chains plummeted in contrast to the Justin Sun-founded blockchain.
  • Major competitors like Avalance and Solana dipped more than 30% in TVL over the last month.
  • Only Ethereum and Binance Smart Chain are currently ahead.
  • The rise in Tron’s backing could stem from its recently launched USDD algorithmic stablecoin.
  • USDD adopts a similar mechanism leveraged by Terra’s UST which recently crashed.

Justin Sun’s Tron blockchain has climbed to the third-largest decentralized finance ecosystem after rising by 45% in total value locked over the past 30 days. Tron (TRX) sits third ahead of Avalanche (AVAX) and Solana (SOL) in the DeFi rankings with $5.94 billion in TVL according to data from Defi Lama.

While Tron has grown massively over the last month, other chains have experienced significant declines in their TVLs as the broader cryptocurrency market suffered heavy losses. Market leaders like Bitcoin and Ethereum have been on a downtrend since November 2021. 

Tron has gained 45% in TVL in the last month and is currently ranked third behind Ethereum and BNBCHAIN. In contrast, other blockchain TVLs have fallen by 30% to 60%. The reason is mainly related to USDD, an algorithmic stable currency launched by Tron. https://t.co/86mcTs30Re

— Wu Blockchain (@WuBlockchain) May 30, 2022

On-chain data revealed that the top 20 chains have dipped at least 30% in their respective TVLs in the last 30 days. A huge difference compared to the notable growth in Tron.

Indeed, Vitalik Buterin’s Ethereum and the so-called “ETH killer” network Solana are now the only chains ahead of Tron. However, the newly crowned third-largest blockchain by TVL boasts a smaller ecosystem compared to the top two blockchains. 

Both ETH and BSC have well over 200 protocols building on their chains while Tron has nine projects in its ecosystem, as of press time.

See also

JP Morgan is Experimenting with Blockchain Technology, Eyes Tokenizing Equities and Possibly DeFi 9

Tron's TVL Rises By 40% On The Back USDD Algorithmic Stablecoin Hopes 11
Top 10 DeFi TVL (Source Defi Lama)

Tron’s USDD Algorithmic Stablecoin

Crypto proponents surmised that interest in Justin Sun’s USDD stablecoin could be behind the surge in TVL growth. The token was announced back in April 2022 on the back of hype surrounding Terra’s UST stablecoin. As EWN reported, USDD adopted a design with UST. 

The coin supposedly maintains its peg through an arbitrage algorithm that allows investors to exchange 1 USDD for a dollar worth of TRX in the event of a depeg. Similar to UST’s high yield promises on Anchor, USDD also boasts north of 20% returns on staked tokens through protocols like JustLend.

Although the stablecoin’s market share remains a far cry away from Terra’s UST, USDD is growing in market cap and seemingly driving activity across the TRX ecosystem.

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Ethereum

CoinFlex Will Issue $47M Worth of “Recovery Tokens” After Withdrawal Freeze

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CoinFlex Will Issue $47M Worth of “Recovery Tokens” After Withdrawal Freeze
  • CoinFLeX will issue recovery tokens to help fund customers’ withdrawals.
  • The exchange had run into trouble after one individual’s accounts went into negative equity, resulting in the halting of withdrawals.
  • It will issue $47 million worth of the Recovery Value USD (rvUSD) tokens.

Futures crypto exchange CoinFLEX will issue recovery tokens called Recovery Value USD (rvUSD) as a solution to enable withdrawals again. The platform has suspended withdrawals as a result of market volatility, with some users even having a negative balance as a result.

$47 million of the rvUSD will be issued, and CoinFLEX hopes that this will help clear the outstanding debt from that one individual who had a negative balance. A whitepaper covers the details of the token, and there are several caveats to become an investor. The minimum subscription is 100,000 USDC.

The exchange aims to reopen withdrawals by June 30, but this will be subject to receiving funds for the rvUSD issuance. CoinFLEX says that it has been speaking to large buyers and “believes there is significant interest in the terms presented.”

CoinFLEX also said that it plans to implement transparency measures going forward. Additionally, it will work on a new model of futures in direct response to the recent incident. Regarding the transparency, CoinFLEX said,

“The notional (USD) value of every account’s futures positions will be made publicly available via an external auditing firm that will attest to these futures positions every hour. We will also make available the margin (collateral) backing these positions in USD value and break down the collateral by type 1 (stablecoins), type 2 (highly liquid coins), and type 3 (low liquidity coins).”

Crypto Community Not Too Convinced About rvUSD

The crypto community’s response to CoinFLEX’s rescue method has been ambivalent. FatMan, who has been known for his analysis of the Terra incident, called the move “amazingly degen.”

He summarizes the whole incident as the platform offering the individual a $47 million uncollateralized loan, turning his debt into a token while offering 20% APY on it. In other words, they are using this token to fund other customers’ withdrawals.

This may sound like something too good to be true — and that might very well be the case. Such unusual and potentially risky strategies will invite the attention of regulators like the United States Securities and Exchange Commission (SEC). That is the fear that some investors have, but it remains to be seen if this will actually play out that way.

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Crypto.com Removes 13 Crypto Tokens From Its Earn Program Including Shiba Inu, Dogecoin and Tezos

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Crypto.com Removes 13 Crypto Tokens From Its Earn Program Including Shiba Inu, Dogecoin and Tezos
  • Crypto.com has removed 13 crypto tokens ,including Shiba Inu, Dogecoin and Tezos from its Earn program. 
  • The exchange has added Fantom, Ziliqa and Near to its Earn portfolio. 

Crypto.com, a leading cryptocurrency exchange, has decided to remove 13 cryptocurrencies from its Earn program. The exchange took to Twitter to share the update adding that it will be removing Doge, Shiba Inu, Tezos, and more from the program and will be adding Zilliqa, Fantom and Near to its Earn portfolio. 

Crypto.Com Has Removed 13 Cryptocurrencies From Its Earn Program

Crypto Earn is an initiative started by crypto.com to help users allocate their preferred crypto into the program to start accruing rewards. This would eventually help users expand their crypto assets by accumulating additional rewards in multiple cryptocurrencies. 

However, in an updated blog published earlier today, the exchange has decided to remove 13 crypto coins from its earn program including Doge, Shib, XTZ, MKR, EOS, OMG, FLOW, KNand C, ICX, COMP, BIFI, ONG, GAS, STRAX, and BNT. However, the exchange will also be adding three new tokens to its earn portfolio, i.e Zilliqa, Near, and Fantom. Per the updated blog post, users will be able to earn 5% rewards on FTM, and 6% rewards on ZIL and NEAR. 

“Effective from 27 June 2022, 10:00 UTC, we will be adding new tokens to Crypto Earn. Users can now enjoy rewards rates of up to 5% p.a. for FTM, and 6% p.a. for ZIL and NEAR.”

Crypto Community Reacts To Crypto.com’s Removal Of 13 Tokens. 

The response to crypto.com’s decision to remove 13 crypto tokens was mixed with multiple users expressing their discontentment on Twitter. Some users opined how the current crypto staking percentages are similar to the modern-day banking rates. 

Reduction of interest rates on stable coins again… no point holding them in your app. Get similar interest in a bank

— will (@WJB2201) June 27, 2022

While others responded that they were particularly unhappy about the exchange’s decision to remove Doge and Shib from its platform.

Why no more Shiba and Doge staking?

Are you trying to get people to leave your platform?

That was the reason I even started a CDC account!

— M42boost (@m42boost) June 27, 2022

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Ethereum’s Merge to Reduce Demand for GPUs, says Morgan Stanley

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Ethereum’s Merge to Reduce Demand for GPUs, says Morgan Stanley

Summary:

  • According to a Morgan Stanley analyst, demand for GPUs should reduce with Ethereum transitioning into a proof-of-stake network.
  • The crypto drawdown has further reduced the profitability of Ethereum mining.
  • However, the Ethereum mining community could venture into alternatives such as Ethereum Cash and Ravencoin.

Ethereum’s transition from a proof-of-work algorithm to proof-of-stake through the Merge of the Beacon Chain with the ETH mainnet could reduce demand for GPUs.

According to a research note by Morgan Stanley’s equity strategist Sheena Shah, the less energy-intensive proof-of-stake will reduce demand for GPU miners. In addition, the crypto drawdown in the markets has also resulted in reduced profits for Ethereum miners, further eliminating the need for GPUs. The note said:

and Ethereum currently require powerful computers for the mining process and consume a lot of energy which governments and regulators are increasingly concerned over. If Ethereum moves to using Proof-of-Stake (PoS) it will eliminate the need for miners (reducing demand for GPUs) and drastically reduce energy requirements.

Ethereum Miners Could Find Alternatives in Ethereum Classic and Ravecoin – Bloomberg.

However, in another analysis by Bloomberg in mid-June, it was forecasted that Ethereum miners would probably keep mining till the Merge occurs later this year. Furthermore, some miners considered transitioning their Ethereum miners to mine Ethereum Classic or Revencoin.

The team at Ethereum Classic has already started enticing existing Ethereum miners by requesting that they plan their migration to ETC before the Merge occurs. They further emphasized that Ethereum Classic was more than able to handle the abandoned Ethash hashrate. They explained:

This Merge event will disenfranchise the largest EVM’s Proof of Work mining ecosystem. Ethereum Classic is well positioned to absorb much of this abandoned Ethash hashrate.

However, Ethash miners might not realize that Ethereum Classic operates a modified version of Ethash called ETChash.

The Ethereum Classic team also pointed out that the Thanos Upgrade in November 2020 slowed the hashrate of the DAG. This, in turn, ‘has allowed GPU miners to operate their equipment longer on ETChash than Ethash.’ They added:

New ETChash miners will find comfort in knowing that Ethereum Classic made a long-term commitment to Proof of Work consensus through the network’s Die Hard Upgrade in 2018.

If you’re new to the ETC mining ecosystem, you’ve found a long-term home on Ethereum Classic. A battle-tested network where you can properly plan your mining business’ capital and operational expenditures around a predictable monetary policy and stable network that is widely integrated throughout the cryptoverse.

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