The TRX token surged 27% as the DAO spent $220 million to purchase more TRON network’s native token. The purchase was made to induce buying pressure among traders. The DAO has also allocated an additional $100 million for the purchase.
At the time of writing this article, TRX was down nearly 5% and trading at $0.06. On Wednesday, it was trading at four cents during the European session. Justin Sun, the TRON founder, pumped more than $2 billion this week to boost the TRON market. He tweeted that the funding rate of shorting TRX on Binance is negative 500% in April. As such, the TRON reserve will deploy $2 billion to fight them. Sun believes a short squeeze is coming.
Moreover, additional demand for TRX was higher as traders tried to bring USDD back to its peg. USDD is TRON stablecoin Decentralized USD. It had plunged to 91 cents because of contagion risks in the crypto market. The depeg is also attributed to the weak macroeconomic sentiment. An effort was seen across the broader market on Thursday as Bitcoin and Ethereum recorded gains after a brief rally.
Earlier in the week, TRON plowed $650 million of USDC into its reserve to safeguard the crypto market, reaching $2.5 billion. TRON DAO’s recent move shows that the network is doing whatever it can to avert a repeat of the TerraUSD collapse. Sun said this has been in the plan but Terra LUNA’s demise accelerated and prioritized it for the team. TRON wants to have USDD be overcollateralized to make market participants comfortable about using it in the future.
