TRON to launch algorithmic stablecoin USDD

On May 5, TRON developers will launch the algorithmic stablecoin USDD backed by a native TRX token and the equivalent of $10 billion in highly liquid assets, according to Justin Sun, head of the Tron Foundation, who stated this.

USDD, in its algorithmic design, mirrors the Terra Labs model of the stablecoin UST. The reserve structure is not disclosed.

«When the price of USDD falls below $1, users and arbitrageurs will be able to send 1 USDD into the system and receive $1 equivalent in TRX. When the price of USDD exceeds $1, it will be sensible to convert the $1 equivalent in TRX to 1 USDD. Regardless of market volatility, the protocol will maintain the peg of USDD to $1 in a 1:1 ratio in a decentralised manner via algorithms», Sun explained.

Around TRON, the asset will also be available on Ethereum and BNB Chain via the BitTorrent Chain cross-chain bridge.

The stablecoin will be managed by the TRON DAO. According to Sun, the organisation will offer an annual yield on USDD of about 30%.

It is envisaged that decentralized and centralized entities will be invited to integrate USDD into their products, maintaining a consistent interest-rate policy.

Sun stressed that USDD would protect property rights, excluding the possibility of freezing or confiscation.

Development of USDD envisions four phases: 1.0 Space, 2.0 ISS, 3.0 Moon and 4.0 Mars. Details are not disclosed.

Terraform Labs founder Do Kwon has voiced support for USDD.

«Decentralized economies deserve decentralized money — every blockchain will run on decentralized stablecoins,» he predicted.

. @trondao is launching an algorithmic stablecoin with mint-and-burn mechanics called $USDD — mint and burn TRX, redeem against TRX

Decentralized economies deserve decentralized money — every blockchain will run on dect. stables soon

👏 @justinsuntron https://t.co/R4xuwtva6O

— Do Kwon 🌕 (@stablekwon) April 21, 2022

Earlier in March 2021, Do Kwon took on a $11 million challenge from users who doubted the stability of LUNA, which underpinned UST.

In April, Terra’s UST eclipsed Binance USD by market capitalization.

Earlier, speculations arose about Near’s planned launch of an algorithmic stablecoin USN.

Subscribe to ForkLog news on Telegram: ForkLog Feed — the full feed of news, ForkLog — the most important news, infographics and opinions