USDD has changed from an algorithmic stablcoin to a hybrid one
USDD's collateral ratio is currently 225%.
USDD's collateral ratio will not fall below 130%.
USDD becomes the decentralized stablcoin with the highest collateral ratio.
Launched initially as an algorithmic stablecoin, USDD has seamlessly evolved into a stable token with excessive collateral, according to the project's blog.
Initially, USDD was a full copy of UST, a stablecoin whose price must be supported by a special arbitrage mechanism. However, shortly after USDD was launched, the benchmark algorithmic stablecoin UST lost its peg to the dollar and collapsed. In early June, TRON founder Justin Sun said that the project team had learned a lesson from the UST crash and noted that USDD would be backed by a combination of stable and volatile assets.
On June 5, the USDD blog reported that Stablecoin will now be an over-collateralized token with a guaranteed collateral ratio of at least 130%. That's higher than the 120% of DAI, the benchmark decentralized stablcoin, the USDD team claims.
The USDD team has also begun posting USDD collateral information on the TRON DAO Reserve website.
According to the data provided, USDD currently has 14,040 BTC, 240,000,000 USDT and 1,906,000,176 TRX in collateral. These crypto-assets are in a reserve account and another 8.29 billion TRX are in contract to burn. Thus, assets totaling about $1.53 billion support the 667,521,101 USDD now in circulation.
"Overcollateralization of USDD strengthens stability and confidence in USDD. Stablecoin reserves will include BTC, TRX and several staplecoins such as USDC, USDT, TUSD, USDJ, with a 130% collateral ratio. In other words, each USDD is backed by BTC, TRX, stabelcoins, and possibly other highly liquid assets of at least $1.3," the USDD blog says.
TRON DAO Reserve plans to accumulate reserves totaling $10 billion. Justin Sun believes this will help USDD become the most trusted decentralized stackablecoin with the highest collateral ratio.