Stablecoins are some of the most relevant cryptocurrencies right now, thanks to ongoing volatility. Amid pullbacks in altcoins, investors have turned to stablecoins, which offer the benefits of decentralized finance without the drawbacks of price whiplash. The Tron (TRX-USD) network recognizes the surging interest in safer crypto assets, and it is looking to join the market with its own stablecoin. The news is helping to lift TRX crypto prices.
Tron is the layer-1 network founded by entrepreneur Justin Sun in mid-2018. He built it to be a competitor to Ethereum (ETH-USD) and now, a competitor to others like Solana (SOL-USD) and Avalanche (AVAX-USD). With 1,400 decentralized apps (dapps) on its network, it presents one of the most robust alternative offerings to Ethereum’s more than 3,000 dapps.
In recent years, the network has been making a great effort to catch up even more with Ethereum. Most notable was its acquisition of the file-sharing service BitTorrent (BTT-USD), which it revamped for the blockchain. These types of moves have helped the Tron network become one of the largest of its kind, holding nearly $4.5 billion in assets on-chain.
And it seems that Justin Sun is not ready to slow down now. On the contrary, the network is moving at an aggressive pace to outperform the other layer-1s that have come to prominence. One thing the network is doing to achieve this goal is implementing a native stablecoin.
TRX Crypto Sees Big Gains With Stablecoin Announcement
It seems a native stablecoin is a must-have for any layer-1 worth its salt these days. Ethereum already has several, while competitors like Binance (BNB-USD) and Terra (LUNA-USD) have implemented their own in various ways. Tron has not previously had its own stablecoin, though. However, the network has revealed its plans to remedy this, to the appreciation of TRX crypto holders.
Early today, the Tron network announced its plans to roll out its own native stablecoin called USDD (USDD-USD). According to the press release, the stablecoin will not rely on reserve asset backings like Tether (USDT-USD) or USD Coin (USDC-USD). Rather, it will be an algorithmic stablecoin, using mathematic formulas to remain pegged to $1. This is reminiscent to stablecoins like TerraUSD (UST-USD), which retains its peg thanks to an elastic total supply.
In addition to the stablecoin, Tron will be implementing a decentralized autonomous organization (DAO) called Tron DAO to manage the coin. The network will also establish a $10 billion DAO reserve so that the organization can provide collateral backing for USDD.
The stablecoin offering is coming soon, with a set release date of May 5. The news serves to vastly broaden the DeFi capabilities of the network. As such, the TRX crypto is seeing a nice boost from the news. The coin is currently up 15% on the day. And, volume is booming up to $2.3 billion, a nearly 130% increase over yesterday’s volume.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.