#usdd以稳见信 @USDD - Decentralized USD

What exactly is the stability of Brother Sun's stablecoin?

The operational model of USDD has been significantly enhanced in the “USDD 2.0” version, mainly through the following mechanisms to achieve stability and provide returns:

· Over-collateralization mechanism: All issued USDD is backed by higher-value crypto assets. The collateralization ratio typically ranges from 120% to 150%, and has even exceeded 200% at times. The main collateral includes TRX, BTC, ETH, and USDT.

· Price Stability Module (PSM): This is a core innovation that allows users to perform 1:1 zero-slippage exchanges between USDD and stablecoins like USDT. When the market price of USDD deviates from $1, arbitrageurs will use the PSM for arbitrage, helping the price return to its peg.

· Smart Allocator — Yield feature: This is key for USDD's transformation into a “yield-bearing asset.” The system will invest part of the excess reserves into audited DeFi protocols like Aave to earn returns, and this portion of the yield (e.g., approximately 3.94% annualized yield) will be distributed to users staking USDD. Users' principal and stablecoin exchange functions remain unaffected.

⚙️ Project Development Status and Ecosystem

· Market Performance: USDD has shown overall stability in maintaining its peg, but its market share is relatively small. Its market capitalization (approximately $570 million) is significantly lower compared to giants like USDT.

· Multi-chain Expansion: To broaden its user base, USDD has been deployed from the Tron native to the Ethereum network and plans to expand to other public chains like BNB Chain in the future.

· Main Application Scenarios: Currently, it is primarily deeply integrated within the Tron ecosystem for DeFi trading, lending, payment, and as a yield-bearing asset.

Overall, USDD is a decentralized stablecoin project with innovative mechanisms, but it faces significant questions regarding centralization and fierce market competition.

· Its advantages lie in enhanced stability through over-collateralization and the PSM module, and the innovative provision of endogenous returns through the Smart Allocator.

· Its main challenges are the high concentration of holdings, dependence on the Tron ecosystem and TRX, and how to expand its market in a tight space among giants.