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Jafrin Ahmed
Jun 6, 2022
by Jafrin Ahmed

Tron Modifies its USDD Stablecoin to Avoid Terra-Like Disaster

Tron USDD
Tron, which launched its USDD algorithmic stablecoin last month is making major changes to its architecture to avoid the fate of the Terra blockchain and the fallout of its UST algorithmic stablecoin.

USDD Now the First Over-Collateralized Stablecoin

According to the Tron DAO Reserve, Tron’s new stablecoin’s $688M market cap is 217% collateralized, with a minimum guaranteed collateralization ratio of 130%.

Tron founder Justin Sun confirmed that plans to over-collateralize USDD were in place before the TerraUSD meltdown. However, the recent event moved it up on the list of priorities.

“We want to have USDD to be over collateralized, which I think will make market participants more comfortable about using us in the future,” Sun said.

The collateral is partly made up of Tron’s native token TRX, Tether, and Bitcoin (BTC), which amount to $783M. Other assets make up the total of $1.37B, which is still below the $10B initially promised on April 21, 2022, which Sun hopes to eventually raise.

The move comes just a few weeks after the collapse of the Terra ecosystem, erasing a combined market value of over $60 billion.

Following Terra's demise, Tron emerged as the third-largest blockchain within the DeFi space just behind Ethereum and BNB Chain. According to data provided by DefiLlama, its total value locked (TVL) has exceeded $6 billion, followed by Avalanche and Solana.

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Tron Modifies its USDD Stablecoin to Avoid Terra-Like Disaster
Jafrin Ahmed
Jafrin is a cryptocurrency journalist/researcher fascinated by the world of decentralization. She is hopeful towards blockchain’s innovation and its potential to reshape the world for good. Currently, she is bringing out the best of cryptosphere via covering the latest ins and outs of the blockchain space.

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