Tron Founder Justin Sun Addresses USDD 2.0 Launch

Tron founder Justin Sun seems weary of repeated inquiries regarding the upcoming USDD algorithmic stablecoin.

> “USDD 2.0 is about to launch with a 20% APY, fully subsidized by Tron DAO. All interest will be sent in advance to a transparent address,” he posted to X. “There’s no other reason, it’s simply because we have plenty of money. So, stop asking me questions like ‘where does the yield come from.'”

Launched in 2022 as a competitor to Terra’s UST token, USDD is primarily backed by Tron’s TRX token and is supposedly managed by Tron DAO.

Stablecoins have gained popularity in crypto, traditional finance, and commerce as companies seek to capitalize on a potentially explosive market growth. The market for U.S. dollar-pegged stablecoins, like USDC and USDT, is valued over $215 billion, with predictions suggesting it could exceed $500 billion by year’s end.

Meanwhile, the algorithmic and crypto-backed stablecoin market is currently valued at about $13 billion, according to The Block Data Dashboard, with Tron’s USDD having a circulating supply of $747 million.

Backed by Multiple Digital Assets

USDD faces criticism; for instance, Bluechip, dubbed the “Moody’s of stablecoins,” assigned it the lowest stability ranking due to its heavy reliance on TRX and perceived lack of transparency.

Bluechip noted, “USDD does not have a governance system. USDD holders have no legal or code-based protection and are at the mercy of Tron DAO Reserve.”

Per its website, “USDD is secured by the over-collateralization of multiple mainstream digital assets (e.g., TRX, USDT). The total value of collateralized assets significantly exceeds the USDD in circulation, with the collateral ratio set at 120%.”

USDD is backed by approximately $2.6 billion in assets, most of which are TRX tokens, according to the website.