Why TRON’s Total Value Locked (TVL) is up 45%

according to Wu Blockchain, the total value locked (TVL) of the TRON network has increased over the past 30 days. This increase appears to be related to the launch of USDD, the network’s native algorithmic stablecoin.

Related reading | USDT remains strong amid stablecoin crisis, Tether CTO says

As NewsBTC reported a month ago, TRON founder Justin Sun announced the deployment of USDD on May 5, 2022. This digital asset operates similarly to the Anchor protocol of the LUNA CLASSIC network. USDD allows users to earn 30% Annual Yield (APY) by staking on the JustLend platform.

TRON launched its own algorithmic stablecoin to capitalize on the product’s popularity. However, a massive LUNA-UST (Terra Classic’s algorithmic stablecoin) that impacted the crypto industry emerged in May.

The LUNA price crash and the UST devaluation seem to have little effect on TRON. Data from DeFi Llama supports the increase in TVL.

That figure reached $6 billion, up 14% in the past week alone. TRON’s TVL has surpassed Polygon, Avalanche, Solana and Fantom. If this trend continues, the metric could surpass the TVL on Binance Smart Chain, which is currently close to $9 billion.

Further data provided by DeFi Llama indicates that JustLend is a protocol with a TVL percentage. The platform recorded $2.8 billion in TVL, followed by JustStables with $1.4 billion.

In a short period of time, JustLend and algorithmic stablecoins appear to have taken over the TRON ecosystem, propelling it into the top three TVLs in the overall DeFi space. This seems to indicate that algorithmic stablecoins are still very popular in the crypto space despite the events on the Terra Classic network.

Source: DeFi Flames

Will TRON’s USDD survive the Terra Classic event?

Last week, a pseudonymous analyst surveyed the USDD and TRON ecosystems to determine whether the new digital asset could withstand current market conditions. The analyst pointed to the collapse of the old Terra Classic network and its impact on the fully algorithmic stablecoin.

However, analysts believe that USDD and its network are in a different state. Currently, TRON-based algorithmic stablecoins are mostly backed by insiders, analysts say.

Therefore, there may be room for retail and other investor classes to adopt the U.S. dollar. This could benefit TRX and its ecosystem, as it seems to have done recently. Analysts said:

(USDD) It’s in a fairly early stage and only insiders are involved. There’s room for latecomers and even retailers to get in before it takes on the same risks as Luna. Timing is everything in the musical chair. The USDD mcap is only 2.5% of the UST peak.

Furthermore, analysts believe that USDD does not work exactly like UST, but is “actually more like Maker” with a different collateral mechanism but has buying pressure on TRX. Altcoins are doing well compared to other assets.

Related reading | TRON joins the stablecoin war to launch USDD with 30% APY, when is this

TRX is trading at $0.08, trading sideways for 24 hours. TRX has been able to bounce back on the back of its algorithmic stablecoin despite a drop in the price of the larger cryptocurrency.

TRON TRX TRXUSDT
The price of TRX has surged significantly since the launch of the stablecoin USDD on the 4-hour chart. resource: TRXUSDT trading view



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