A large sum of USDT was sent from an unidentified address to the Binance exchange. As the news spread, everyone panicked, trying to figure out who was behind the operation.
Whale Alert, an expert blockchain tracking service, recently announced the transaction of 100,000,000 USDT from an unidentified wallet to Binance in one of the tweets.
Reason For Such A Huge USDT Transaction
The transaction amount will support as security to support Tron’s new USDD stablecoin. Justin Sun proposal says that $100 million will be spent on BTC and TRX. The amount will be made use in the same way as Luna and BTC are used in UST.
To manage the price of the USDD algorithmic stablecoin, the method requires selling and buying volatile assets. USDD presents a higher yield for anyone willing to allow liquidity into the stablecoin, which will attract additional buying activity from investors and traders.
Just after the Terra incident, Sun received backlash from investors across the cryptocurrency community. Because after this incident, Sun said USDD will gain support from risky assets in the same way that UST is.
The basic problem mainly with the BTC and TRX backup model is that a digital asset can lose almost 50% of its value in a few days. The USDD should have a minimum value that is absorbed by the underlying security in order to preserve stability and maintain the peg to the USD.
USDD’s valuation stands at $702 million at the time of reporting, which the Tron Reserve DAO will easily handle. To prevent Terra’s UST and LUNA, TRON Foundation will have to raise the security backing. This will happen if the capitalization surpasses $5 billion.
