TRON to impose new model for securing USDD stablecoin after Terra’s collapse

The team will set a reserve of about 130% of the total amount of coins issued

06.06.2022 - 10:40

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What’s new? TRON founder Justin Sun has announced plans to implement an “over-collateralized” model for the USDD algorithmic stablecoin. This model is intended to protect the asset from the rate crash that happened earlier with the TerraUSD (UST) stablecoin. According to a press release, the decentralized autonomous organization TRON DAO Reserve (TDR) will set the reserve amount for USDD at 130% of the total amount of coins issued.

Press release on the H.E. Justin Sun website

What else is known about the new collateral model? The reserve will be based on a basket of fiat-collateralized stablecoins (such as USDT and USDC) and coins such as BTC and TRX. Currently, the team has already allocated over $550 million in various assets to the reserve and will continue to do so as the USDD supply grows.

TDR’s further plans include setting aside a reserve of $2 billion by the end of the first phase of the model implementation and $10 billion in total to support the project over the long term.

TRON is a decentralized network and platform for decentralized applications. Transactions and operations within it are performed using its own native token TRX, which is used for staking, voting, or transferring value across the network.

On May 14, Justin Sun reported that TRON has no plans to abandon the further development of its own USDD stablecoin, despite the collapse of the Terra ecosystem. He stressed that during the development of USDD, the team was focused on the healthy growth of the asset and wanted its market value to remain relatively small compared to the native token TRX and its market capitalization.

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