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The top-20 blockchain network TRON has partnered with the experienced crypto market maker Wintermute. The deal will see the latter firm bring greater liquidity to TRX trading pairs across various crypto exchanges.
Wintermute also recently became a member of TRON DAO. The decentralized autonomous organization is committed to furthering TRON adoption as it seeks to become the dominant smart contract network. Such an established market maker joining the TRON DAO should bode well for the organization's decentralized stablecoin, USDD.
TRX market strengthened by Wintermute deal
TRON and its native digital currency TRX have just received a major liquidity injection across the various centralized and decentralized exchanges at which the top-20 crypto trades. A press release, published Sept. 12, revealed the deal but did not include details of the amount paid to secure the partnership.
Stating that Wintermute is "thrilled" to contribute to the TRON ecosystem, David Micley, the firm's Director of Business Development, added:
"This latest partnership between Wintermute and TRON is an extension of our efforts to partner with leading DeFi projects and offer our support through what we do best — making markets more liquid."
Elsewhere, the press release details other perks that the partnership will bring to the TRON ecosystem. Alongside additional liquidity to ensure tight spreads during extreme price volatility, Wintermute will provide market insights and strategic guidance.
TRON DAO's powerful new member
Having transitioned to community governance in December 2021, the TRON DAO oversees the development of the TRON ecosystem and works to further its adoption. The ecosystem's newest liquidity partner, Wintermute, joined the decentralized organization, becoming its ninth member, in August 2022.
The arrangement enables Wintermute to mint and redeem USDD, which ensures the TRON-based stablecoin maintains its $1 peg. Despite recent market volatility and the algorithmic stablecoin UST crashing heavily in May 2022, USDD has held its peg remarkably well.
Unlike centralized stablecoins like USDT or USDC, USDD does not rely on a single, central custodian. Instead, the TRON DAO Reserve holds various crypto assets, such as BTC, TRX and USDT, and mints USDD against this collateral.
Since these assets are often volatile, the TRON DAO Reserve holds more assets than are required to back each USDD in circulation. This ensures that price volatility among the backing assets cannot destroy the peg. In many respects, the system is similar to Maker DAO's DAI token. USDD also has a feature called the Peg Stability Module that enables users to swap USDD for other stablecoins at a 1:1 ratio.
At no point since its May 2022 launch has USDD risen or fallen by more than 4% from its target, which is quite an achievement for a decentralized stablecoin. As a hugely experienced crypto market maker, Wintermute's addition to the TRON DAO should ensure that USDD avoids the same fate as many historic examples that have experimented with such decentralized stability mechanisms.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice