Cody McGrath 
The market cap of USDD has significantly dropped in the last week but Tron DAO has bolster its reserve since the USDD depeg.
The Tron ecosystem took a significant hit last week when the USDD stablecoin lost its $1 peg. Traders were concerned since USDD was created last month as a competitor to Terra’s UST, an algorithmic stablecoin. Another depegging of a similar asset meant that TRX’s price fell for a while .
On Sunday, the US dropped to a new low of $0.93 before reclaiming the $0.95 level. According to CoinMarketCap, the stablecoin is currently trading at $0.95, down 0.70 percent in the previous 24 hours.
More crucially, USDD has lost around $19 million in market capitalization in the last week. The stablecoin de-pegging had an impact, as the market cap dropped from $715 million on June 13 to $696 million today.
In fact, before this week’s setback, stablecoin has only ever failed to increase its market cap daily. Despite a slight wobble on June 2, the US has steadily increased in market capitalization since its introduction on May 5.
Following the de-pegging of the stablecoin, the Tron DAO has increased its reserves to back the blockchain. The DAO boosted its USDC supply by 300 million last week.
The total collateral value supporting the stablecoin is currently $2.34 billion, consisting of 14,040 BTC and $1.08 billion USDC. The Tron DAO intends to safeguard the stability and security of USDD by maintaining a collateral ratio of 323.23 percent.
The Tron team claims that the over-collateralization of numerous prominent cryptocurrencies ensures the stability and security of USDD.
The recent drop to $0.93 in the USDD depeg generated alarm in the crypto community, recalling the UST meltdown. On Twitter, a trader known as ‘Austerity Sucks’ inquired if there was any mechanism in place to keep the USDD pegged.
“No mechanism even to hold the peg in, just random money issued with an informal “collateralization” which does nothing to keep the peg.”
Tron is currently trading at $0.06, a 0.52 percent decrease in the last 24 hours.