Justin Sun’s stablecoin boasted backing in BTC, TRON, and Tether and changed its operating model to avoid a collapse like Terra’s UST so let’s read more today in our latest Tron news.
Created as an algorithmic stablecoin, Justin Sun’s Terra USDD stablecoin is now shifting gears towards a hybrid model with improved transparency. Justin Sun’s stablecoin is over-collateralized with a collateral ratio of 226% as per the data from Tron’s DAO with the organization responsible for maintaining the collateral of USDD. The team behind USDD promised a minimum collateral ratio of 130% which is higher than the 120% collateral ratio maintained by the DAI Stablecoin. The collateral backing USDD includes 14,040 BTC, 240 million USDT, and about 1.9 billion Tron as the native token of the ecosystem.
The creator of USDD Justin Sun Added:
“Congratulations to USDD on becoming the first over-collateralized decentralized stablecoin! A total of $1.37 billion of assets are backing the 667 million USDD in circulation.”
Tron as the native token of the Tron ecosystem is up by 5.21% in the past day and it is changing hands at $0.084 as per the data from CoinmarketCap. USDD is similar to Terra’s UST stablecoin as an algorithmic stablecoin governed by smart contracts with no collateral backing. UST crashed and wiped out about $60 billion In investors’ wealth in a week’s time and since then, the stablecoins were heavily criticized including USDD. Investors can pay up to 1 USDD for $1 worth of TRX if the price of the trades is above the dollar peg. By selling the newly-minted TRX the users can pocket profits for keeping the coin at the dollar-peg and vice versa so the same algorithm proved inefficient with UST and the key reason that the Tron DAO opted to change how the stablecoin operates:
“This has been in the plan, but Terra/Luna definitely accelerated and prioritized this for our team. We want to have USDD to be overcollateralized.”
As recently reported, Tron is a cryptocurrency led by Justin Sun launched in 2018 and now, Tron is the third-biggest blockchain in terms of total value locked. As per DeFi Llama, the total value locked on Tron’s 9 nine different apps stands at $5.9 billion or up by 44% over the past month. The only two chains ahead are BNB chain and the industry leader Ethereum so Binance Smart Chian’s TVL stands at $10.8 billion and ETH hosts over $93 billion.
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