News

FTX Crisis: Justin Sun’s Algorithmic Stablecoin USDD Depegs

Algorithmic stablecoins USDD has started to depeg suddenly and is now trading at $0.974 as Justin Sun engages with FTX
Published by
FTX Crisis: Justin Sun’s Algorithmic Stablecoin USDD Depegs

Tron founder Justin Sun looks to work on a “wholistic solution” to save FTX from the liquidity crunch. Meanwhile, on-chain data suggested algorithmic stablecoin USDD has started to depeg suddenly and is now trading at $0.974. Justin Sun earlier responded that probably Alameda is selling USDD to cover liquidity at FTX. Now, he says it’s “basically panic sell on Ethereum blockchain.”

Advertisement

Is FTX’s Alameda Behind Justin Sun’s USDD Depeg

According to on-chain data, USDD algorithmic stablecoin selloff by whales caused the stablecoin to depeg. On November 8, a whale swapped 4.49 million USDD for 4.46 million USDT at a ratio of 0.9935. As a result, USDD lost its peg and fell to $0.983.

On November 9, another whale exchanged 6.65 USDD for 6.51 USDC at a ratio of 0.9799, causing USDD to drop further to $0.975. Moreover, the USDD liquidity pool on Curve, where users can trade USDD for other stablecoins such as USDT, USDC, and DAI is significantly imbalanced, with USDD accounting for 82.27%.

After several people raised concerns over USDD depeg, Tron founder Justin Sun commented that Alameda Research is possibly selling USDD to cover the liquidity of the FTX crypto exchange.

“I think probably Alemeda just sold their USDD to cover the liquidity of ftx exchange. The pool currently is back with a healthy rate.”

Tron DAO Reserve manages supply and collateral for USDD algorithmic stablecoin. According to Tron DAO Reserve data, USDD total collateral backed by TRX, Bitcoin, stablecoins USDT and USDC has dropped to $1.7 billion. The collateral ratio has also dropped to 214.42%.

However, all stablecoins are staked and earning yields in JustLend. In addition, over 99% of TRX is locked inside a staking governance contract. Thus, the available collateral is only 500 million USDC and 14,040.6 BTC worth $230 million. The actual collateral ratio is only 114%.

Tron DAO Reserve just announced to purchase total 1 billion USDT in order to increase its USDD collateral. In a prior tweet, Tron DAO Reserve stated to purchase $300,000,000 USDT to safeguard the overall blockchain industry and crypto market.

Advertisement

Binance’s Stablecoin BUSD Strengthens

While other stablecoins risk losing their peg, Binance’s BUSD stablecoin is showing strength despite the FTX crisis. Whales are getting out of USDT and USDD, converting holdings to BUSD.

As part of increasing transparency, Binance revealed details on hot and cold wallet addresses. Binance has 475,000 BTCs, 58 million BNB, 4.8 million ETH, and 21.7 billion BUSD. Other stablecoins holdings include 17.6 billion USDT and 601 million USDC.

Advertisement

Share
Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • News

Standard Chartered Predicts Bitcoin Could Drop Below $100K Amid U.S.–China Trade Tensions

Standard Chartered analyst Geoff Kendrick has predicted that the Bitcoin price could suffer a significant…

October 22, 2025
  • News

Rising Demand for Verifiable Crypto Ownership Drives Launch of Trezor Safe 7

Crypto ownership is a topic that has been discussed across major forums globally in the…

October 22, 2025
  • News

Robinhood Lists Binance Coin as BNB Outperforms BTC, ETH, SOL YTD By Over 30%

Crypto exchange Robinhood has listed the Binance coin for spot trading for its U.S. customers.…

October 22, 2025
  • News

Bitget Partners With Google Developer Group On Hackathon To Support AI Innovation

Bitget, a leading crypto exchange in the world, has joined forces with Google Developer Group…

October 22, 2025
  • News

Can Cardano Save Kadena? Hoskinson Reaches Out After KDA Token Plunges Amid Scam Allegations

Kadena has announced it was shutting down operations, sending its KDA price into a freefall.…

October 22, 2025
  • News

Analyst Turn Bullish with $400 SOL Target as Hong Kong Approves First-Ever Solana ETF in Asia

Hong Kong has officially approved the region’s first-ever Solana ETF in Asia. This comes as…

October 22, 2025