Tron's Stablecoin USDD Depeg! Will Tron Follow Terra Crash?

On June 13, 2022, as two crypto giants, Bitcoin (BTC) and Ethereum (ETH), recorded new lows for 2022, another bad news came to the much volatile crypto market: USDD lost its dollar peg!!!
Specifically, USDD, the algorithmic stablecoin of the Tron blockchain, dropped by 3%, trading around the $0.97 price level. At the same time, Neutrino USD (USDN), an algorithmic stablecoin backed by Waves, also fell beneath its peg, trading at a low of 0.94 at the time of writing. As the de-pegging of USDD spread more fear to the community, Tron's TRX token also witnessed a hard fall, shedding 17.8% since June 13.The USDD depeg came when the market had not yet fully recovered from the collapse of TerraUSD (now TerraClassicUSD, USTC), which happened just one week after the launch of USDD.
Read more about LUNA and UST Crash here.The USDD incident draws comparisons to the UST fiasco, raising concerns among the community about whether the depeg drags Tron down.1) UST and USDD are both algorithmic stablecoins that are not backed by collateral.
2) UST and USDD both use a burning mechanism. USDD is minted by burning TRX and vice versa.
3) UST and USDD are both backed by an organization to support their peg.Justin Sun, the head of Tron, stated that he learned from UST and LUNA's lessons.
According to Justin Sun, Tron's USDD focuses on healthy growth by keeping its market cap lower than that of TRX, the Tron DAO reserve, and the overall crypto market cap.Terra's UST, on the other hand, grew too fast in a short time and used over-leverage, given its large market cap but a relatively small reverse before the crash. Justin also believed that the high yields and no withdrawal limit of the Anchor Protocol, Terra's flagship lending platform, partly contributed to the failure of UST.In response to the USDD depeg, Justin Sun stated that 700 million USDC had been injected into TRON DAO Reverse to defend the USDD peg.
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Following the statement, USDD bounced to $0.99 in late June 13, while TRX kept declining.
However, despite further efforts to keep USDD pegged to its dollar and safeguard the crypto market, the USDD has continued to head far away from its dollar peg since June 14.Therefore, within the same scenario, given the similarity in fundamentals of USDD and UST, it will come as no surprise that USDD will ultimately step into the same death spiral as UST.However, it's worth noting that the chance that USDD can restore its dollar peg is higher than UST as Justin Sun and Tron, with a lot deeper pockets, seem to handle problems better than Do Kwon and Terra.