TRON Will Launch USDD Its Own Decentralized Stablecoin
Tron will have its own native stablecoin called USDD, Tron founder Justin Sun announced on Thursday.
TRON DAO will partner with other blockchain industry leaders to establish decentralized algoritmic stablecoin (USDD). It will leverage the power of mathematics and algorithms to achieve the overarching goal of financial freedom for all. In another open letter, Sun mentioned that a TRON DAO Reserve would be established to ensure the sustainable development of USDD.
At the start, USDD will be issued as a TRC token on the TRON network. The TRON DAO Reserve will serve as a transparent mechanism to manage the reserves backing the USDD.
USDD will not rely on any centralized institutions for redemption, management, and storage. Instead, it will achieve full on-chain decentralization. USDD will be pegged to the underlying asset, TRX, and issued in a decentralized manner.
The stablecoin won’t operate like traditional ones do, such as Tether (USDT) and Circle’s USD Coin (USDC), which keep dollars (and other assets) in bank accounts as backing. Instead USDD will be an algorithmic stablecoin like TerraUSD (UST) and Frax Finance (FRAX).
When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. When USDD’s price is higher than 1 USD, users and arbitrageurs can send 1 USD worth of TRX to the decentralized system and receive 1 USDD. Regardless of market volatility, the USDD protocol will keep USDD stable at 1:1 against the US dollar via proper algorithms in a decentralized manner.
Taken together, this decentralized currency protocol with a stable price will significantly expand use cases of crypto, making it truly accessible with far-reaching implications for the blockchain space and the real economy.
Tron DAO will also provide custody reserves of up to $10 billion in highly liquid assets to serve as collateral backing for USDD. This is similar to Terraform Labs founder and CEO Do Kwon’s plan to acquire $10 billion of bitcoin to serve as reserves for UST.
USDD on TRON marks a small step for developing TRON-based stablecoins and yet a giant leap for mankind in pursuing the ultimate financial freedom.
People should enjoy more than the four freedoms that Franklin Roosevelt once proposed – freedom of speech, freedom of worship, freedom from want, and freedom from fear. They should also be entitled to freedom of finance, freedom of wealth, and freedom to protect their private properties.
The end goal is to make equitable access to financial services a fundamental human right. In time, financial services will become a necessity like water and air, accessible to people worldwide.
USDD is set to launch on May 5th and will also be available on Ethereum (ETH) and Binance Chain (BNB).
