Tron’s Justin Sun Follows in Terra’s Footsteps, Announces Algorithmic Stablecoin USDD

In the last week, the decentralized and algorithmic stablecoin on the Terra (LUNA) platform, TerraUSD (UST), has become the third largest on the market, surpassing Binance USD. The success of the project is such that the Tron network, founded by Justin Sun, will also launch its own algorithmic stablecoin. This is the Decentralized USD (USDD), which Sun called “the most decentralized stablecoin in human history”. The announcement was made this Thursday (21), in an open letter that Justin Sun published on his blog. According to Sun, the Decentralized Autonomous Organization TRON DAO will partner with other leaders in the blockchain industry to establish the USDD. The idea is that the stablecoin leverages the power of mathematics and algorithms to promote financial freedom for all. As Justin Sun highlighted, a TRON DAO reserve will be created to ensure the sustainable development of USDD.

Tron’s stablecoin USDD is coming

Initially, USDD will be issued as a TRC token on the TRON network. Meanwhile, the TRON DAO reserve will serve as a transparent mechanism to manage reserves that back the stable cryptocurrency.

“USDD will not depend on any centralized institution for redemption, management and storage. Instead, it will achieve complete decentralization in the chain. USDD will be pegged to the TRX asset and issued in a decentralized manner,” Sun said.

To keep the price stable, when the USDD price was less than 1 USD, users and arbitrageurs can send 1 USD to the system and receive 1 USD in TRX. On the other hand, when the USDD price was over 1 USD, users and arbitrageurs can send 1 USD in TRX to the decentralized system and receive 1 USD.

“Regardless of market volatility, the USDD protocol will keep USDD stable at 1:1 against the US Dollar through proper algorithms in a decentralized manner,” Justin Sun highlighted.

The TRON stablecoin is expected to enter circulation on May 5, 2022. The stablecoin will be available on Ethereum and BNB Chain via the BTTC cross-chain protocol.

Founder of Earth comments on launch

Who commented and celebrated the launch of USDD was Do Kwon, the founder of the Terra network.

“Tron DAO is releasing an algorithmic stablecoin with mint-and-burn mechanics called $USDD – mint and burn TRX, ransom against TRX. Decentralized economies deserve decentralized money.” wrote him on Twitter.

The mint-and-burn equilibrium model is an economic token framework used by certain crypto networks. This model uses a two-token system: payment tokens and tradable “value-seeking” tokens. In this model, users must burn the “search for value” tokens to receive the “payment” tokens. And that’s exactly how the USDD stablecoin will work. Read also: Token 0x rises 53% after partnership with Coinbase in NFT market Read also: ApeCoin’s entry into the Metaverse could make the price reach new highs, says analyst Also read: Web3: Emmanuel Macron defends Europe leader in cryptocurrencies, NFTs and metaverse