Tron founder Justin Sun appears to be tired of fielding questions about the next iteration of the 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.'"
The stablecoin launched in 2022 as a competitor to Terra’s now UST token. It is backed primarily by Tron’s TRX native token. USDD is supposedly managed by Tron DAO.
Stablecoins' growing popularity is observable within the spheres of crypto, traditional finance and commerce as companies try and position themselves in a market poised for potentially explosive growth. The market for U.S. dollar-pegged stablecoins backed by cash and cash equivalents like USDC and USDT — typically considered safer than algorithmic or crypto-backed stablecoins — is valued at over $215 billion with some analysts predicting it will more than double to $500 billion by the end of the year.
The market for algorithmic and crypto-backed stablecoins, currently registers at about $13 billion in total supply, according to The Block Data Dashboard. The Tron stablecoin has a circulating supply of $747 million, according to The Block Price Page.
USDD has its critics. Last year, Bluechip, the self-proclaimed “Moody’s of stablecoins,” gave the stablecoin its lowest stability ranking, referencing its heavy reliance on TRX as a backing asset and a lack of transparency. “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,” it wrote at the time.
According to its website, "USDD is secured by the over-collateralization of multiple mainstream digital assets (e.g. TRX, USDT). The total value of collateralized assets is significantly higher than that of USDD in circulation with the collateral ratio set at 120%."
USDD is backed by about $2.6 billion in assets, most of which are TRX, tokens, the website also states.
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