Justin Sun presented USDD, a new algorithmic stablecoin native to the Tron (TRX) blockchain of which he is the founder. Its operation based on arbitration and a store of value is undoubtedly reminiscent of the very popular UST of Terra (LUNA).
A new stablecoin native to the Tron (TRX) ecosystem
Justin Sun, the founder of the Tron (TRX) blockchain , announced on Thursday the arrival of an algorithmic stablecoin on this network. Responding to the name of USDD for “Decentralized USD”, it will be available from May 5th.
Its operation is reminiscent of the UST of the Terra (LUNA) blockchain from which it is strongly inspired and which became the third stablecoin by capitalization this week.
Indeed, the USDD will use the same arbitrage system to maintain the ratio of 1:1 with the dollar (the peg). Thus, when the price of the stablecoin of Tron falls below 1 dollar, it will then be possible to send USDD to the protocol so that it is burned and thus receive an equivalent sum in TRX. And vice versa in the other direction.
In addition, the USDD will also be supported by a store of value which will have to amount to 10 billion dollars. If Justin Sun did not detail the composition of it, he nevertheless declared that it will be a basket of liquid assets raised from investors.
The Tron DAO will oversee this reserve and offer an initial annual return of 30% .
This asset will be issued via the BitTorrent (BTT) protocol, initially on the Ethereum (ETH) and BNB Chain (BNB) blockchains.
What next for USDD?
If the operation on which the USDD must be based has already proven itself thanks to the UST, this does not guarantee that it will be adopted and will meet with the same success. The news was nevertheless welcomed by Do Kwon , founder of the Terra blockchain :
This is not the first time that a stablecoin native to the Tron ecosystem has been under consideration. Something had been tried 3 years ago with the TRXD, collateralized in dollars, but it was a failure .
Part of the reason the Tron blockchain enjoys some use today is the ability to transfer USDT onto it at low cost . It therefore remains to be seen if the USDD is only there to ride on the popularity of the UST or if it will be able to seduce investors by presenting real cases of application.
