For the second consecutive day, the TRON DAO Reserve announces plans to withdraw substantial quantities of TRX from trading platforms.
TRON DAO Reserve is prepared to withdraw another 3 billion TRX tokens from a centralized exchange and a decentralized finance (DeFi) lending protocol as part of efforts to prevent a similar occurrence of Terra’s UST collapse.
The foundation made the announcement in a tweet on Thursday (June 16, 2022). However, the DAO did not name the CeFi and DeFi platforms where the withdrawals will occur.
With the latest announcement, the foundation intends to pull back a total of 5.5 billion TRX. The planned withdrawals are part of efforts to shrink liquidity for short traders and prevent a collapse, as was the case for Terra’s UST stablecoin.
Also, the move will stop short-traders from tanking the price of TRX as the token is used to redeem USDD like LUNA for UST. If they can cause TRX to decline sharply, the coin will not be valuable enough to honor USDD redemptions.
As previously reported by CryptoPotato, the decentralized organization revealed plans to withdraw 2.5 billion TRX tokens from Binance to “safeguard the blockchain industry and crypto market.”
The TRON DAO Reserve transferred $100 million USDC to Binance to purchase TRX and further deployed another $120 million to buy the token.
Earlier in June, Sun said TRON DAO will inject $2 billion to fight short positions on Binance and protect the USDD peg.
However, USDD is yet to gain parity with the U.S. dollar as the algorithmic stablecoin is currently trading at $0.97, according to CoinGecko. TRX’s price, on the other hand, is $0.060.
Anthonia is a fintech writer who has been involved in the crypto space since 2017 covering developments across regulations, adoption, and several other aspects of the Industry. When not neck-deep in the crypto news cycle, Anthonia spends her free time globetrotting and playing video games.