Justin Sun, the founder of the Tron (CRYPTO: TRX) blockchain, laughed off claims that he was behind an organized attack that took down Terra (CRYPTO: LUNA) and its stablecoin TerraUSD (CRYPTO: UST).
What Happened: In an interview with CoinDesk, Sun denied any involvement in UST’s de-pegging event and said he believes the situation unfolded due to market panic rather than a coordinated attack.
“I think the LUNA problem is still that they used too much leverage. That’s why when the market collapses, the money they have in their reserve is just not enough to recover. We all witnessed the market panic,” said Sun.
A week before the chaos encapsulated Terra’s ecosystem and the wider crypto market, Sun launched his own algorithmic stablecoin USDD. Industry watchers criticized the project for being similar in almost every way to Terra’s UST.
See Also: HOW TO BUY TRON (TRX)
The similarities between UST and USDD aren’t limited to mint and burn mechanics — Tron also plans to build a $10 billion reserve fund for USDD, 80% of which would comprise of Bitcoin (CRYPTO: BTC).
Sun stated that one of the main differences in how USDD will operate compared to UST is that it will lower the risk-free yield offered on its staking protocol after it reaches a certain market capitalization.
“I think yesterday they had to cut it [interest rate] from 20% to 4%. They should have done that a long time ago,” he said.
Sun said Tron’s current 30% yield on offer is “basically a marketing strategy” and the interest rate would be lowered once more people contribute liquidity.
“The crypto industry is going to evolve and algorithmic stablecoins have got to be there because I think this is a very important component of our ecosystem in the first place. We can’t blame the algorithm just because LUNA failed,” said Sun.
Price Action: According to data from Benzinga Pro, TRX was trading at $0.06, down 18% over the last seven days.
Photo: By Piskev91 on Wikimedia
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