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Justin Sun and the TRON DAO Plan to Launch a Stablecoin Backed by $10 Billion worth of Crypto Assets

Justin Sun and the TRON DAO Plan to Launch a Stablecoin Backed by $10 Billion worth of Crypto Assets

The TRON DAO and Justin Sun plan to launch a decentralized algorithmic multi-chain stablecoin dubbed USDD by May 5, 2022.
Dalmas

April 22, 2022

Introduction​

The TRON DAO and Justin Sun, the co-founder of the Tron Network and one of the most influential crypto personas, plan to launch a decentralized algorithmic multi-chain stablecoin dubbed USDD by May 5, 2022.

As per an open letter on April 21, the stablecoin will first deploy on the highly scalable and low fee Tron network, helping prime its DeFi and NFT ecosystems.

At later stages, USDD will be launched on the equally active Ethereum and BNB Chain through the BTTC cross-chain protocol.

Unlike common stablecoins like USDT and USDC, USDD will be guided by “mathematics and algorithms”, eliminating the need for intermediaries. At the same time, USDD will be backed by $10 billion worth of various cryptocurrencies, including TRX.

The eventual launch of the USDD highlights the rapid evolution of stablecoins. Fiat-pegged tokens have metamorphosized to be a crucial cog in the multi-trillion crypto scene, forming a permanent fixture, especially in DeFi. Unlike other fungible cryptocurrencies, stablecoins are, as the name implies, “stable”, tracking the performance of fiat currencies. In the case of USDD, each token in circulation will always equate to one USD.

In the letter, Justin Sun stated that active arbitrageurs and TRX holders would always ensure the USDD tracks the USD regardless of market volatility via “proper algorithms” deployed “in a decentralized manner”.

USDD will be pegged to the underlying asset, TRX, and issued in a decentralized manner. When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. When USDD’s price is higher than 1 USD, users and arbitrageurs can send 1 USD worth of TRX to the decentralized system and receive 1 USDD.

USDD’s development will be in four phases–1.0 Space, 2.0 ISS, 3.0 Moon, and 4.0 Mars. In the first stage, dubbed “1.0 Space”, the management of the stablecoin will be entrusted to TRON DAO Reserve and partnering blockchain institutions.

Specifically, the TRON DAO will be in charge of securely storing the $10 billion of crypto holdings that will back the stablecoin. These assets will be drawn from “early initiators”. It will be used as an early-stage reserve to maintain the USDD to USD peg and ensure smooth convertibility.

Tron is currently one of the most active USDT issuance platforms because of its low transaction fees and scalability.

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Introduction

Dalmas

Dalmas is an active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies.

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