YouTuber Calls Tron’s USDD Stablecoin the Next LUNA Ponzi Scheme
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Will Tron Suffer the Same Fate as LUNA?
In a YouTube video posted on Friday, Stephen Findseisen, a.k.a. Coffeezilla has warned crypto enthusiasts that they should be wary of their investments in USDD stablecoin and this could be the next LUNA Ponzi Scheme.
In a separate post on Twitter, the noted YouTuber started by saying that while USDD claims to be an algorithmic stablecoin, it isn’t either of those things as its minting and burning feature is turned off. Also, only whitelisted institutions can mint new USDD by burning Tron, but can't go back the other way, proving it's completely centralized.
According to him, this is good for USDD, because it can't go through an algorithmic death spiral like LUNA. However, he also noted that without an arbitrage mechanism, this could make it completely unstable.
Justin Sun, The Next Do Kwon?
Coffeezilla further points out that Tron DAO Reserve claims to back $2 billion worth in crypto assets. However, it remains unclear whether these assets will actually be deployed.
The notable crypto analysts also discovered that the BTC wallet of the DAO is just two years old. This means it isn't a new wallet but could belong to Tron founder Justin Sun.
Lastly, he concludes that 94% of USDD has been minted by Justin Sun himself when looking at Sun's public Ethereum wallet, which recently received $40 million USDD by the TRON bridge contract.