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Tron founder ready to spend $2 billion again on vendor war
Tron ecosystem founder Justin Sun announced his willingness to spend $2 billion to protect the TRX token from short-selling
The cryptocurrency market has lost nearly $300 billion in three days, with the combined value of all coins in circulation momentarily falling to $946 billion, down from $1.23 trillion as of Friday, June 10. Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies updated multi-month lows. TRON (TRX) fell 17% to $0.061.
The pronounced bearish dynamics of the cryptocurrency market prompted Justin Sun, the founder of Tron to take measures to protect the native token project TRX from the actions of investors.
Tron’s founder tweeted that the Tron DAO pool will direct $2 billion to fight short sellers. According to Sun, the measure will discourage traders who want to open short positions against TRX and stop the token from falling:
“I don’t think they’ll be able to hold out for at least a day. A short squeeze is coming.”
A short squeeze is a situation in which traders who have bet on an asset’s decline are forced to close positions by buying back the underlying token. In the case of TRX, Sun noted that the funding rate to sell TRX on Binance reached 500%.
In May, at the height of the Terra crisis, San had already pledged $2 billion to protect the ecosystem. At that time, the funding rate for selling TRX on Binance was 100%.
Tron DAO defends itself.
The Tron ecosystem is having a busy day. The creator of the project declared war on TRX sellers and committed $2 billion to it, while Tron DAO mobilized to protect its newborn algorithmic stablecoin USDD.
Amid extreme market volatility, several stablcoins lost parity at once, including USDD. Tron DAO quickly invested $700 million in USDC to protect USDD’s peg to the U.S. dollar.
USDD is almost the full twin brother of TerraUSD (UST), the famous stablecoin that detached itself from the dollar and brought down the entire Terra ecosystem. However, the project seems to have learned its lesson from the UST crisis and managed to prepare for potential market turmoil.
Stablecoin’s peg to the dollar was originally supposed to be backed by algorithms, but in early June, Sun said it intended to beef up USDD collateral: according to the Tron Foundation, the new infusion of USDD is secured at 300%.
