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In April 2022, the Tron network launched USDD, a token pegged to the U.S. dollar, as an "over-collateralized stablecoin," meaning its likelihood of slipping below $1 should be lower due to excessive reserves backing its valuation.

USDD stablecoin slips below $1 peg

But it was not enough to keep USDD's price anchored to $1 on Nov. 8 when some whales dumped over 11 million USDD tokens to seek exposure in rival stablecoins Tether (USDT) and USD Coin (USDC). A day later, USDD's price fell to as low as $0.96, followed by a modest recovery to $0.98 on Nov. 10. 

The selling pressure was visible more broadly in the USDD liquidity pool on Curve's decentralized finance protocol. As of Nov. 10, the pool was heavily imbalanced, holding nearly 82.50% in USDD and the rest in USDT, USDC, and DAI stablecoins. 

Tron founder Justin Sun speculates that Alameda Research, a crypto hedge fund headed by FTX's Sam Bankman-Fried, could be the whale dumping its USDD holdings to avoid insolvency. Alameda's balance sheet reportedly was 50% FTT (FTT), FTX's native token that has recently fallen more than 90%.

Miscalculated collateral reserves

USDD is issued by Tron DAO Reserve (TDR), which also serves as the custodian of its collateral. TDR is primarily responsible for selling the collateral to maintain USDD's peg in the event of a sell-side shock.

In April 2022, the Tron network launched USDD, a token pegged to the United States dollar as an “over-collateralized stablecoin,” meaning its likelihood of slipping below $1 should be lower due to excessive reserves backing its valuation.

USDD stablecoin slips below $1 peg

But it was not enough to keep USDD’s price anchored to $1 on Nov. 8 when some whales dumped over 11 million USDD tokens to seek exposure in rival stablecoins Tether (USDT) and USD Coin (USDC). A day later, USDD’s price fell to as low as $0.96, followed by a modest recovery to $0.98 on Nov. 10. 

The selling pressure was visible more broadly in the USDD liquidity pool on Curve’s decentralized finance protocol. As of Nov. 10, the pool was heavily imbalanced, holding nearly 82.50% in USDD and the rest in USDT, USDC and Dai (DAI) stablecoins. 

Tron founder Justin Sun speculates that Alameda Research, a crypto hedge fund headed by FTX’s Sam Bankman-Fried, could be the whale dumping its USDD holdings to avoid insolvency. Alameda’s balance sheet reportedly was 50% FTX Token (FTT), FTX’s native token that has recently fallen more than 90%.

Miscalculated collateral reserves

USDD is issued by Tron DAO Reserve (TDR), which also serves as the custodian of its collateral. TDR is primarily responsible for selling the collateral to maintain USDD’s peg in the event of a sell-side shock.

Bitcoin (BTC) miners could form the next BTC price “trigger,” research warns as withdrawals intensify.

In a Quicktake post for on-chain analytics platform CryptoQuant on Nov. 10, contributor MAC.D suggested that miners could soon face “bankruptcy.”

Research: Network conditions “will strangle” miners

After BTC/USD fell 20% in a matter of days, miners began operating at a higher cost than the block subsidy and transaction fees they earned.

The result is mining rigs being idled and miners selling BTC to cover expenses.

“BTC security is at an all-time high, but its mining volume is gradually decreasing. This will strangle the miners,” MAC.D explained.

Venture capital firm Sequoia Capital tweeted out a letter sent to its partners on Nov. 10 revealing the firm had marked its $213.5 million investments in FTX and FTX US down to $0, claiming them as a complete loss.

The letter said that the crisis facing FTX has “created a solvency risk” but claimed its exposure to the exchange is “limited” in its Global Growth Fund III, where its cost basis for the FTX portion of the fund totaled $150 million.

Sequoia also reassured its partners that the writing off of FTX wouldn’t have a detrimental impact on the fund, saying it accounted for less than 3% of the capital committed to it, adding:

“The $150M loss is offset by ~$7.5B in realized and unrealized gains in the same fund, so the fund remains in good shape.”

The venture capital firm also reported to have invested $63.5 million into FTX and FTX US from its Sequoia Capital Global Equities Fund, however, the holdings represented less than 1% of the entire portfolio.

Kris Marszalek, CEO of cryptocurrency exchange Crypto.com has become the latest crypto company promising to publish "audited proof of reserves," amid the downfall of rival exchange FTX. 

"We share the belief that it should be necessary for crypto platforms to publicly share proof of reserves," said Marszalek, adding that his company "will be publishing our audited proof of reserves."

The idea for crypto companies to publish their proof of reserves has gained traction in the wake of the FTX liquidity fiasco. Binance CEO Changpeng “CZ” Zhao on Nov. 8 also pledged to start a Proof-of-Reserves audit system to give the public insights into the state of their reserves. 

The Crypto.com CEO's comments come only hours after the exchange temporarily suspended withdrawals and deposits of USDC and USDT on the Solana network on Nov. 9.

In an email to users on Nov. 9, which had been circulating on Twitter, Crypto.com reportedly notified users of an “Immediate suspension of UDSC and USDT Deposits and withdrawals on Solana.”

Financially-troubled crypto exchange FTX has brought its website back online following a period of intermittent downtime — with the trading platform now sporting a banner confirming withdrawals are halted and advising users against depositing.

The FTX website returned online at approximately 9:00 pm UTC  on Nov. 9, after encountering five separate periods of network downtime spanning over two hours, according to the “IS IT DOWN OR JUST ME” website.

The crypto community on Twitter has also noticed a new bright red banner that can be seen throughout the website that reads:

“FTX is currently unable to process withdrawals. We strongly advise against depositing.”

A pinned message on the official FTX Telegram Group on Nov. 8 also confirmed the halting of withdrawals, without any estimates about when they would return. 

The total value locked (TVL) on the Solana chain has plummeted 32.4% in the last 24 hours, as news stemming from the collapse of FTX has sent waves through the crypto ecosystem. 

According to DefiLlama, at the time of writing, Solana’s TVL has fallen to $423.68 million, down 32.4% in the last 24 hours, a far cry from its all-time-high (ATH) of $10.17 billion on Nov. 9, 2021.

TVL measures the total value of all assets locked into DeFi protocols. As TVL increases that means more coins are deposited within the DeFi protocols, and can indicate bullish sentiment, while a falling TVL shows that investors are pulling their funds out of the ecosystem for one reason or another.

The fall in TVL went as far as a 51.7% decline over 24 hours, however, but slightly corrected leading up to the writing of this article.

The Solana-based liquid staking protocol Marinade Finance has seen the biggest loss in TVL on the chain, having fallen 35.1% to $115.79 million within the last 24 hours.

Investor sentiment in the crypto market is floundering after Binance decided to nix its agreement with FTX to purchase the distressed cryptocurrency exchange. The events have sent Bitcoin to a new yearly low, while other altcoins have also taken a sharp downturn. 

Data from Cointelegraph shows Bitcoin (BTC) declining to $15,698 amid the chaos caused by FTX’s potential insolvency and the failure of the Binance deal. Analysts are turning to technical charts to try and find the next price path.

Analyst expects downside continuation with brief support at $12K

Independent market analyst, CanteringClark said that BTC price could possibly find a short-term bounce at $15,000. Citing an assortment of indicators, the analysts suggested that Bitcoin could eventually settle around the $12,000 level.

Will Bitcoin price drop below key multi-year moving averages?

Analyst Caleb Franzen explained that the estimated moving average (EMA) is an indicator utilized to gauge price over a certain period of time. According to Franzen, if Bitcoin price continues to fall, it would be the first time in its history that the 52 week and 104 week EMA's crossed below the 156 week EMA.

Read more: Bitcoin sinks to new yearly low at $16.8K as FTX insolvency fears turn into contagion

Investor sentiment in the crypto market is floundering after Binance decided to nix its agreement with FTX to purchase the distressed cryptocurrency exchange. The events have sent Bitcoin to a new yearly low, while other altcoins have also taken a sharp downturn. 

Data from Cointelegraph shows Bitcoin (BTC) declining to $15,698 amid the chaos caused by FTX’s potential insolvency and the failure of the Binance deal. Analysts are turning to technical charts to try and find the next price path.

Analyst expects downside continuation with brief support at $12K

Independent market analyst, CanteringClark said that BTC price could possibly find a short-term bounce at $15,000. Citing an assortment of indicators, the analysts suggested that Bitcoin could eventually settle around the $12,000 level.

Will Bitcoin price drop below key multi-year moving averages?

Analyst Caleb Franzen explained that the estimated moving average (EMA) is an indicator utilized to gauge price over a certain period of time. According to Franzen, if Bitcoin price continues to fall, it would be the first time in its history that the 52 week and 104 week EMA's crossed below the 156 week EMA.

Read more: Bitcoin sinks to new yearly low at $16.8K as FTX insolvency fears turn into contagion