Crypto entrepreneur Justin Sun's Tron (TRX) blockchain has revealed details about supporting its new algorithmic stablecoin USDD, in what appears to be a commitment to maintaining trust in the project, after the collapse of the algorithmic stablecoin terraUSD (FSO). More details on supporting the new USDD stablecoin According to the Tron DAO Reserve website, USDD is backed by various crypto assets and stablecoins, which combined will always make up at least 130% of the total amount of USDD in circulation. Collateral assets include Tron's native TRX token, the stablecoin tether (USDT) and bitcoin (BTC). On Sunday, the stablecoin shared real-time updates on its collateralization report on its website for the first time. As of Monday at 09:00 UTC, the DAO said it had $841.8 million in its reserves, with a collateralization ratio per USDD of 226.1%. Source: Tron DAO reserve Of course, it is speculated that the move to overcollateralize USDD comes after the collapse of FSO, which was only partially backed by other digital assets. According to Justin Sun's comments, USDD's over-guarantee move has always been the plan, although he admitted that he was moved higher up the list of priorities after the collapse of FSO.
According to Bloomberg, Justin Sun said: "This was in the plan, but Earth/Moon definitely accelerated and prioritized this for our team [...] We want USDD to be overcollateralized, which I think will make market participants more comfortable using it in the future." USDD is "the most decentralized stablecoin" The new stablecoin was unveiled by Justin Sun in April of this year, with Sun calling it "the most decentralized stablecoin in human history." However, the plan has been widely criticized for being based on the same model as the failed FSO, which famously offered 20% returns to depositors on anchor protocol. According to the TRON DAO Reserve website, USDD currently offers a 30% interest rate to holders who bet on their coins. The yield corresponds to the "benchmark interest rate" of 30% for the stablecoin that had been promised in the project white paper from the beginning, significantly more than what UST offered. According to data from CoinGecko, there are currently just over 667.5 million USDD coins in circulation and the price has managed to stay within a close range of its 1 USD peg since the beginning of this year. The price of Tron Meanwhile, TRX is the 13th coin by market capitalization. It rose 5% in one day and 4.7% in a week, trading at 0.084 USD (at 10:30 UTC).
To find out more: - Is Justin Sun's new Stablecoin just a clone of FSO? - Founder of Tron launches "the most decentralized stablecoin" - Big investors have exited Anchor/FSO - CEO of Binance and the lessons learned from the collapse of Earth - Stablecoins struggle to keep the peg - Tether is back in the spotlight