The USDD stablecoin, issued by the TRON DAO Reserve, has lost its Bitcoin backing with the removal of 12,000 BTC from its formerly listed collateral address. Without the Bitcoin, worth around $726 million, USDD is now primarily backed by TRX, the native token of the Tron blockchain.Responding to reports of the shift, Tron founder Justin Sun said on X (aka Twitter) that what's happening is "not mysterious," comparing the operation to that of MakerDAO.
Key Highlights:
TRX, now the source of its primary backing, is more volatile, holding on to a top 10 spot excluding stablecoins. Currently trading for $0.15, it has surged in recent weeks as Tron and Sun have leaned heavily into leveraging it as a memecoin marketplace. The Tron ecosystem recently surpassed Solana to be the second-largest blockchain by TVL (total value locked), with $8.2 billion across more than 30 different decentralized finance (DeFi) protocols, according to data from DeFi Llama.Read more at Decrypt.
- He stated that USDD was not capital efficient and had a "long-term collateralization rate" of more than 300%.USDD was originally an algorithmic stablecoin, similar to Terra's algorithmic stablecoin UST—which spectacularly collapsed in May 2022. It was then converted into a hybrid model where it would be backed by collateral including Bitcoin, TRX, USDT, and USDC. The market cap of USDD, which is pegged to the U.S. dollar, is around $744 million, according to CoinGecko data.
