TRON founder Justin Sun today announced a new upgrade in its stablecoin project USDD which involved increasing transparency and adding collateral.
According to the medium post published, the project has upgraded itself to the first over-collateralized decentralized stablecoin [OCDS], which it claims to offer faster transactions with the highest collateral ratio.
By doing this, it aspires to advance the Stablecoin 3.0 era, making finance accessible to all.
As per the blog post, USDD enjoys a guaranteed collateral ratio of at least 130%, higher than the 120% set by DAI. The real-time collateral ratio of USDD is published on the TRON DAO Reserve’s website, publicly available 24/7.
Sun stated that the “upgraded, over-collateralized USDD will add more diversified features to underpin its stability. Currently, the 200%+ collateral ratio offers USDD a very strong safety net,” he claimed.
USDD, just like Terra’s algorithmic stablecoin UST, made its appearance on the TRON blockchain on May 5. The latest move is seen as a preventive measure to avoid a Terra Luna situation.
Tron Founder’s Future Roadmap of USDD
On May 31, founder Sun published a blog outlining the lessons he learned from Terra’s dramatic fallout. According to Sun, these lessons will be implemented in TRON’s decentralized stablecoin USDD.
In his blog, Justin mentioned that “Inorganic and unsustainable growth is bad” and “Transparent over-collateralization is critical to preventing depegging” were the lessons he learned after the Terra crash.
In addition to that, the attempt of Terra to establish the Luna Foundation Guard to diversify UST’s collateral and prevent depegging was already too late. The reserve consisted of just $3 billion worth of BTC, which was not enough to secure the nearly $19 billion UST supply, he wrote.
In Sun’s plans, The TRON DAO Reserve will create a utility for USDD across crypto markets to help drive its adoption. USDD trading pairs aim to have more liquidity than USDT or USDC on both centralized and decentralized exchanges.
The blog post concluded with a rough blueprint of USDD’s journey to be crypto’s new settlement currency.
USDD is also planning to extend its support to multiple chains. Currently, they are active on TRON, BNB Chain, and Ethereum.