Tron to Launch a Native Stable Coin called USDD

 Tron to Launch a Native Stable Coin called USDD

 

Justin Sun, the founder of Tron, has announced the launch of a decentralised algorithmic stable coin called USDD on April 21. Sun said on Thursday that the USDD Network will "provide custody service for the $10 [billion] worth of highly liquid assets raised from blockchain industry initiators, and use them as an early-stage reserve."

The announcement was also published on hejustinsun.com in a blog post called "An Open Letter on the Issuance of USDD, a Decentralized Algorithmic Stable Coin on Tron." The letter explains how stable coins have evolved from the "Omni-USDT 1.0 era" to decentralized algorithmic stable coins.

The blog post details that the Tron DAO has partnered with "major blockchain players" in order to launch USDD. The blog post further claims USDD will be "the most decentralized stable coin in human history."

Tron’s USDD launch follows the exponential climb of a few decentralized stable coins. First Makerdao’s DAI has propelled to the top spot in terms of market capitalization among stable coins as it offers an over-collateralization method in order to keep its dollar peg.

In more recent times, Terra’s UST has surpassed DAI’s market valuation, and it also offers an algorithmic reserve method in order to keep its dollar peg. Terra’s UST is now the third-largest stable coin project, as it commands a $17.89 billion market capitalization.

In fact, USDD operates similar to Terra’s UST, and as Sun explained on Thursday, it will be backed by $10 billion in crypto reserves.

In the blog post on hejustinsun.com notes, "In the stable coin 3.0 era, USDD will not rely on any centralized institutions for redemption, management, and storage" "Instead, it will achieve full on-chain decentralization." The blog post adds:

USDD will be pegged to the underlying asset, TRX, and issued in a decentralised manner. When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. 

 

Do Kwon, the founder of Terra, congratulates Tron DAO and Justin Sun

While a number of individuals on Twitter called Justin Sun’s and Tron’s new stable coin a "UST lookalike," Terra’s founder Do Kwon spoke about the comments directed at USDD. "This should be obvious: the more carmakers go electric, the more Tesla wins," Do Kwon said.

Similarly, the more blockchains issue their own sovereign stable coins, the more UST wins. The true moon will be found in helping as many communities become self-sovereign as possible. In another tweet, Do Kwon congratulated the Tron DAO and Justin Sun. Terra’s founder said:

Tron DAO is launching an algorithmic stable coin with mint-and-burn mechanics called USDD, which will mint and burn TRX, redeemable against TRX. Decentralized economies deserve decentralised money, and soon every blockchain will be running on [decentralized] stables.

Tron’s new stable coin has been a topical conversation on social media on Thursday. While USDD will allow people to mint and burn with TRX and hold billions in crypto reserves, some people suggest the project should also hold bitcoin (BTC) as well. Sun’s tweet on Thursday further noted that the Tron DAO reserve will "set its basic risk-free interest rate to 30% per annum."