Hedge fund Oapital, which profited from Terra’s collapse of UST, has started making large transfers in USDD and other stablecoins. Specialists of the Nansen analytical company drew attention to this.

Oapital (labeled @nansen_ai), one of the funds involved in the use of capital $UST de-peg is now actively making big transfers $USDD and other stables.

It doesn’t look great. pic.twitter.com/DBoubXoWvu

— Nansen Intern 🧭 (@nansen_intern) 13 June 2022

“It doesn’t look very good,” experts said.

On June 13, in the midst of a market crash, the Tron team’s algorithmic stablecoin briefly lost its peg against the US dollar. The price of the asset dropped to $0.97. At the time of writing, the stablecoin is trading at around $0.99 (CoinGecko).

On June 12, an analyst under the pseudonym Res noted that TRON DAO Reserve is converting USDD reserves from a stablecoin to volatile Bitcoin and the network’s native token TRX.

Although 5/100M USDT is used to buy more $BTC & $TRXwhat they do is sell their stables to buy variable assets.

if $BTC & $TRX meanwhile the price keeps falling $USDD supply increases, higher risk of uncollateralization becomes even more worrisome

— Res ®️ (@resdegen) 12 June 2022

“If the price of BTC and TRX continues to fall while the supply of USDD increases, the risk of under-collateralization will increase,” he said.

The expert also pointed out that the Tron team reduced the annual percentage rate of return (APY) on stablecoin deposits from 30% to 10.9%.

6/ In addition to the lack of collateral, $USDD APY down from 30% to 10.9%

If we remember, the problems $UST Started when Anchor introduced dynamic rates and 19.5% APY dropped to 18% pic.twitter.com/O7S2ma3a3H

— Res ®️ (@resdegen) 12 June 2022

“Remember, the UST problems started when Anchor introduced dynamic rates and the APY dropped from 19.5% to 18%,” Res wrote.

On June 13, TRON DAO Reserve received 700,000 USDC to peg the USDD peg to the dollar.

For the market extreme situation, @trondaoreserve received 700 million USDC to defend #USDD latch. Now the USDD collateral rate is around 300%. https://t.co/ULYBfjt2i0

— TRON DAO Reserve (@trondaoreserve) 13 June 2022

At the time of writing, the stablecoin is backed by 279% of the supply. However, Res believes it is wrong to include TRX and USDT in their composition. The analyst said that the coins from Tether are locked into the JustLend landing smart contract and are at risk of exploitation.

Recall that Justin Sun, head of the Tron Foundation, announced the launch of USDD in April. On May 10, TRON DAO Reserve started building reserves to support the coin.

In June, Sun announced its intention to keep developers’ USDD “overfunding” at least 130% of the total number. According to him, the team learned a lesson from the collapse of the UST.