Tron founder Justin Solar has boldly heralded USDD as the one “true decentralized stablecoin” in your entire crypto sector. Solar has made a number of promotional statements in current weeks to rally the crypto group towards the stablecoin, forward of the launch of USDD 2.0.
In a February 3 put up on X, the Chinese language-born entrepreneur asserted that USDD gives customers “zero danger of freezing or rug pulls.”
Solar supplied extra tips that could again his claims in a subsequent put up, giving prominence to the decentralized stablecoin for permitting customers full management of their funds with no “authority to freeze” or withdraw them.
Furthermore, based on Solar, nearly all of returns on USDD at the moment come from subsidies supplied by TRON’s decentralized autonomous group (TRON DAO), the place USDT is transformed into USDD to again the yield and reduce the dangers of dropping traders’ funds.
Justin Solar prepares the way in which for USDD 2.0
By means of a sequence of X posts made since January 15, Solar has been speaking concerning the imminent launch of USDD 2.0, which boasts a 20% staking annual proportion yield (APY) for customers.
Nonetheless, the Tron founder’s overly promotional tone has given the crypto group scares, who’re questioning what the precise nature of the adjustments within the new model of USDD is. He clapped again on the pertinent queries about the place the yields hail from, postulating that TRON DAO has “loads of cash.”
USDD 2.0 is about to launch with a 20% APY, absolutely sponsored by @trondao . All curiosity will probably be despatched upfront to a clear handle. There’s no different purpose—it’s just because we have now loads of cash. So, cease asking me questions like “the place does the yield come from.”
— H.E. Justin Solar 🍌 (@justinsuntron) January 15, 2025
Solar’s insights have supplied little readability about how the up to date model will differ from its predecessor, and scanty to no data is obtainable about its updates.
The newest whitepaper for USDD dates again to December 2022, so stakeholders consider little or no has modified within the elementary construction of the stablecoin. In line with the whitepaper, the mission envisions the digital asset as a “decentralized central financial institution within the trade,” with a stability mechanism rooted in decentralized finance (DeFi) rules.
The newest data accessible factors to a doable shift away from a number of the algorithmic options of USDD, with hints that the stablecoin may undertake a construction just like the JUST DAO’s stablecoin (USDJ).
A glimpse into the way forward for USDD 2.0 might be discovered on a beta web site, which mentions a lending protocol that enables customers to mint over-collateralized stablecoins by depositing TRON chain property.
The location additionally references three vaults tied to Wrapped Tron, Tether, and CryptoFlow, which may point out a safer strategy to collateralization in comparison with its predecessor.
Echoes of a stablecoin market struggle
As of early 2025, the stablecoin market continues to be being headlined by giants Tether (USDT) and USD Coin (USDC). Per Coingecko knowledge, Tether holds a commanding market cap of $140 billion, whereas USD Coin follows with a market cap of $54 billion. USDD is on the ninth place within the stablecoin market cap rating checklist with $742 million.
USDD 2.0 staking rewards will rival different gamers together with Ethena’s USDe, which provided a 20% APY in early 2024 however has since lowered its yield to 11%. DAI, the fifth-highest stablecoin by market cap, gives 12% APY when used with the Spark protocol, and USDC offers a extra modest 4.1% APY when deposited in a Coinbase Pockets.
Regardless that the Justin Solar-backed stablecoins promise a lofty yield, the 20% determine inevitably brings to thoughts the notorious collapse of Anchor Protocol’s UST stablecoin in 2022. On the time, Anchor, led by the previous CEO of beleaguered monetary agency Terraform Labs Do Kwon, promised to offer traders 30% yields.
Round Might of 2022, UST misplaced its peg to the greenback, culminating in a catastrophic market crash that worn out $40 billion in worth, based on reviews.
The “Terra collapse” occasion has made some policymakers query the sustainability of high-yield stablecoins. As an example, the European Union’s Markets in Crypto-Belongings Regulation (MiCA) utterly bans the usage of algorithmic mechanisms throughout the bloc’s jurisdiction.
Cryptopolitan Academy: Write a Web3 Resume That Lands Interviews – FREE Cheat Sheet
