InfoNesia.xyz – For a stablecoin
launched amid the fallout of the Terra UST collapse last spring, Tron’s USDD is faring remarkably well.
The success of Tron’s over-collateralized, decentralized stablecoin has helped the smart contract blockchain to double its market share. Tron has jumped from seventh to third place behind market-leaders Ethereum and BSC in total value locked (TVL), with the TVL across Tron’s various apps now standing at $5.2 billion.
Speaking to Decrypt from his base in Singapore, Justin Sun emphasized the importance of maintaining investor confidence in stablecoins through transparent management of funds.
Justin Sun On the Future of Tron’s USDD Stablecoin
The Tron founder tells Decrypt about the network’s decentralized stablecoin USDD, and how Tron aims to “bridge the Web3 world with the real world.
Tron’s plans for USDD also include a compelling use case as legal tender in the Caribbean, and a prominent place on the popular Huobi cryptocurrency exchange, where Sun is now an advisor.
A decentralized, overcollateralized stablecoin
The Tron DAO, which manages the ecosystem since Sun resigned as CEO in December 2021, changed USDD’s operating model in the aftermath of Terra’s collapse.
According to Tron, USDD is now unique in being guided by the first real crypto reserve for the blockchain industry, the Tron DAO Reserve (TDR), with real-time disclosure of the reserve assets backing the stablecoin. These include Bitcoin, Tron’s token TRX, and popular stablecoins USDT and USDC.
USDD is currently over-collateralized with a collateral ratio of 292.8%, according to data from the TRON DAO Reserve, which maintains the stablecoin’s equilibrium. It means that the reserve has enough on hand to buoy USDD in the event of a selloff. TDR’s partners also include big names such as market maker Wintermute, Multichain, and FalconX.
In the six months since it launched, USDD has become the seventh-most-popular stablecoin, and has a market cap of $725 million, but it’s still some way off market leader Tether’s (USDT) $18 billion.