The Total Value Locked in DeFi pools on the Tron network recently surpassed $6 billion. This recent milestone was reached and exceeded on the last day of May.
The last time Tron DeFi pools had a TVL that surpassed the $6 billion mark was in December last year. The new value increase happened less than four weeks after the release of Tron’s USDD.
Is Tron’s USDD a Terrible Idea?
On the 5th of May, Justin Sun announced that the Tron network would be launching another stablecoin. This seemed like a bad idea for community members of the Tron ecosystem. Shortly before the launch, one of the greatest sagas ever in the crypto ecosystem had just happened. Terra’s UST, an algorithmic stablecoin, lost its $1 peg. The token crashed violently, taking LUNA along as it fell down the drain.
Crypto users were losing fate in stables, especially algorithmic stables. The intense volatility of the market also affected USDT. Data from Coinlore revealed that the token dropped to $0.98 that same week before gaining balance once again. During that period of extreme fear, Justin Sun unveiled the USDD.
As expected, the Poloniex exchange affiliated with Justin Sun shared a Tweet to calm investors. The exchange reassured investors that the USDD did not lose its peg despite the extreme volatility in the market. Next, a statement followed this reassurance that sounded warning bells in investors’ minds. Poloniex offered a 40% APY to investors willing to stake their USDD on the platform. This caused an uproar in the community, as many crypto users believe a 40% return yearly is unrealistic and unsustainable.
Recall that Terra’s UST offered a high annual return to investors when the market was still booming, which raised many questions in investors’ minds. Rather than a safe investment, crypto investors who did their due diligence saw the staking rewards as a Ponzi scheme that would eventually crash, and crash it did!
Although Justin Sun has highlighted that the USDD is a decentralized coin that will be cross-chain compatible, these perks cannot keep investors wholly glued to the project. So far, there have been no critical issues related to the USDD, and Tron fans will be hoping to maintain that positive record.