This week, the Tron blockchain became the third largest network in decentralized finance (def) protocols by total value locked (TVL). Interestingly, 48.19% of TVL is held by Justlend defi protocol, an app similar to Anchor Protocol as it offers more than 20% APY for USDD deposits. Amid Tron’s TVL rise, the network’s stablecoin USDD faced skeptics over the similarities USDD has with Terra’s UST.
Tron Takes Third Largest Position for Total Value Locked in Decentralized Finance Protocols
On May 30, 2022, Tron managed to become the third largest blockchain in terms of total value locked. At the time of writing, Tron’s net TVL is $5.94 billion, which is just below Binance Smart Chain (BSC) TVL and just above Avalanche (AVAX) TVL.
Amid the Terra LUNA and UST fallout, on May 12, 2022, Tron’s TVL was $3.97 billion, placing the blockchain in fifth place in terms of TVL size relative to chains. On that day, Tron’s TVL was 16.16% lower than on May 5th, but after the Terra debacle subsided, Tron claimed the third place net in terms of TVL.
This month, Tron’s defi TVL has increased by 45.22% and has increased by 13.73% over the past seven days. Tron’s TVL is dominated by a defi protocol called Justlend, as 48.19% of Tron’s total held in defi is hosted on the Justlend app. Justlend’s total locked-in value is $2.86 billion and has increased a lot since May 21.
$1.08 billion has been added to Justlend since May 21, as the protocol’s TVL has increased by 58% since then. Also, Justlend has been audited by blockchain security firm Certik. Similar to Anchor, USDD deposits on Justlend offer 23.55% APY at the time of writing.
Other notable accounts on Tron in terms of TVL balances include Juststables and Sunswap. Juststables has a TVL balance of $1.41 billion and Sunswap has a total locked value of just under a billion. USDD also managed to become the ninth largest stablecoin among all existing fiat-pegged tokens.
The current market capitalization of Tron stablecoin is $603 million and saw $179.6 million in 24-hour global trading volume. Statistics from Cryptocompare show that USDT and USDC are USDD’s top two trading pairs. Tron’s new algorithmic stablecoin USDD and Justlend’s APY are eerily similar to products once offered by Do Kwon, Terraform Labs (TFL) and the Anchor team.
Tron’s USDD Stablecoin Faces Multiple Critics and Skeptics
There are a number of critics aforementioned “USDD is doomed to fail” and a prayer of criticism about the project being very similar to UST. Data scientist Bennett Tomlin went so far as to say that USDD is not an algorithmic concept of fiat-pegged tokens.
“From what I understand, I can say that USDD is not an algorithmic stablecoin,” Tomlin said. aforementioned. “The only interaction TRD members can do is burn TRX to get USDD. I don’t see a contract going the other way and an algorithm adjusting both mechanisms, except that the mintage is dependent on the oracle price of TRX.” Tomlin Additional:
Supposedly it was the mechanism (they lied a lot about it) that repopulated the AMM in the market module, like the algorithm in Terra. There doesn’t seem to be an algorithm for this.
Despite criticism and speculation, Tron has managed to become the biggest competitor in the decentralized finance world. Furthermore, Tron’s native token tron (TRX) has managed to climb to the 14th position in terms of the largest market capitalizations in the crypto economy.
This is because while bitcoin (BTC), ethereum (ETH) and others have been posting weekly losses for nine consecutive weeks, Tron has managed to fend off most of the market carnage. TRX is up 14.7% over the past two weeks and 30.5% against the US dollar last month.
What do you think of Tron being the third largest in decentralized finance in terms of TVL today? Let us know what you think about it in the comments section below.
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