Tron’s algorithmic stablecoin USDD has been having a rough few days after it started to lose its peg to the $1 mark on December 6th. The stablecoin has since continued to dip, hitting a local low of $0.97 early Monday.

USDD’s 1-week price fluctuations. Source: Coinmarketcap

Justin Sun Says He’s Deploying More Capital

USDD’s instability has thus prompted Tron’s founder and former CEO, Justin Sun, to tweet that he was deploying more capital to bring it back to the $1 mark. His tweet mimics a similar one made by Terra’s Do Kwon back in May as UST began to collapse.

Justin Sun says he is deploying more capital. Source: Twitter

Do Kwon deploying more capital in May. Source: Twitter

However, Do Kwon’s efforts to save UST from collapse turned out to be futile as the algorithmic stablecoin collapsed, taking down LUNA and the rest of the crypto markets in the first major selling event of 2022.

USDD Has a 200% Collateralized Ratio

But, the USDD situation might not get as severe as UST’s collapse in May this year. According to the project’s website, the algorithmic stablecoin is over-collateralised at a ratio of 200.94%. Furthermore, USDD’s collateral is currently valued at $1.457 billion, broken down as follows.

USDD Had Depegged in June and November

To note is that this is not the first time Tron’s USDD has lost its $1 peg. Back in mid-June and during the aftershocks of Terra’s collapse, USDD dropped to as low as $0.9255 due to the crypto-wide anxiety surrounding stablecoins.

From November 10th to the 11th, USDD depegged once again to as low as $0.97 due to a suspected selloff by the FTX-linked hedge fund, Alameda Research. But Tron’s Justin Sun quickly reassured the crypto community that all was well with USDD.

‘I think probably Alameda just sold their USDD to cover the liquidity of ftx exchange. The pool currently is back with a healthy rate,’ he tweeted.