Tron’s over-collateralized, decentralized stablecoin USDD has been doing remarkably well. USDD is unique as its being guided by the first real crypto reserve for the blockchain industry – Tron DAO Reserve (TDR) – with real-time disclosure of the reserve assets backing the stablecoin.
Justin Sun, Tron Founder, plans to use USDD in a compelling use case as a legal tender in the Caribbean and a prominent place on the Huobi crypto exchange. USDD’s significant rise is attributed to Tron DAO as it changed the stablecoin’s operating model in the aftermath of Terra’s collapse. Moreover, it maintains the stablecoin’s equilibrium.
USDD, as per data from Tron DAO Reserve, is over-collateralized with a collateral ratio of 292.8%. This means there is enough on hand to buoy USDD in the event of a selloff. Since its launch six months ago, USDD has risen as the seventh-most-popular stablecoin. It has a market cap of $725 million but is still quite off Tether’s (USDT) $18 billion. USDD stands out from other stablecoins as it only relies on cryptocurrency and other, centralized stablecoins. Sun explained that the reason they came up with USDD is because of centralization. One can use the stablecoin with crypto addresses in a decentralized manner. USDD emerged after learning lessons from Terra’s downfall. Moreover, Tron understands the importance of keeping stablecoins safe from centralized control.
Sun believes in having a strong use case that many stablecoins fail to breach. He said most people use stablecoins to deposit into a pool with 20% API and Tron can use some of the incentives to encourage the growth of the stablecoin. USDD will have a compelling use case thanks to the collaboration between Tron and the government of Dominica. Through this, USDD will be used as legal tender.