Tron’s Justin Sun Reveals Decentralized Algorithmic Stablecoin USDD – Justin Sun, the creator of Tron, announced the creation of USDD, a decentralized algorithmic stablecoin, on April 21. The USDD Network will offer custody service for the $10 billion worth of highly liquid assets obtained from blockchain business initiators and use them as an early-stage reserve, Sun stated on Thursday.
The Tron network’s Justin Sun has introduced a new stablecoin based on the Tron blockchain. A letter on the issuance of a Decentralized Algorithmic Stablecoin on Tron, was also published on hejustinsun.com. The letter explains the evolution of stablecoins from the “Omni-USDT 1.0 period” to decentralized algorithmic stablecoins.
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The Tron DAO has joined with important blockchain players to develop USDD, according to the blog post. USDD will be “the most decentralized stablecoin in human history,” according to the blog post.
The debut of Tron’s USDD followed the meteoric rise of a few decentralized stablecoins. First, Makerdao’s DAI soared to the top of the stablecoin market capitalization rankings, owing to its over-collateralization mechanism for maintaining its dollar peg.
Terra’s UST has recently outperformed DAI’s market valuation, and it also offers an algorithmic reserve strategy to maintain its dollar peg. Terra’s UST is presently the third-largest stablecoin project, with a market valuation of $17.89 billion.
USDD, in fact, is quite similar to Terra’s UST, and Sun announced on Thursday that it would be backed by $10 billion in crypto reserves to begin with. “USDD would not depend on any centralized institutions for management, redemption, or storage in the Stablecoin 3.0 era,” according to a blog post on hejustinsun.com. Instead, this would achieve complete decentralization on the blockchain.
The following is taken from the blog post:
“USDD would be tied to the underlying asset, TRX. Users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX when the USDD price is lower than 1 USD.”
Tron’s Justin Sun Reveals Decentralized Algorithmic Stablecoin USDD – While some on Twitter referred to Justin Sun and Tron’s new stablecoin as a “UST lookalike,” Terra’s CEO Do Kwon addressed the comments levelled at USDD. Do Kwon congratulated the Tron DAO and Justin Sun in another tweet.
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On Thursday, Tron’s new stablecoin became a hot subject on social media. While USDD will allow users to manufacture and burn TRX while also holding billions in crypto reserves, some have recommended that the project also include bitcoin (BTC). Furthermore, according to Sun’s tweet from Thursday, the Tron DAO reserve will “set its fundamental risk-free interest rate to 30% per annum.”
