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Tron founder Justin Sun explains why decentralized USD (USDD) is different from Terra’s failed decentralized UST stablecoin.
In an interview with CoinGecko, Sun said that Tron’s algorithmic stablecoin, USDD, is a hybrid that uses the best aspects of all USD-pegged assets on the market.
I think USDD is a hybrid model of DAI, UST and other stablecoins. Basically we studied all the algorithms in the decentralized stablecoin market. of stablecoins to make it a better choice for traders in the market.
First of all, the downside of the Ethereum and Bitcoin blockchains is that they don’t have a native stablecoin, so I think Bitcoin. Because it’s not a smart contract platform, it’s Ethereum I think DAI, basically DAI is a decentralized stablecoin on Ethereum.
Note, however, that DAI is developed on Maker, not blockchain-based. Using ETH as collateral and creating DAI, the governance structure does not use ETH as a governance structure. I am using MKR for the structure. This also means that makers are creating smart contracts on Ethereum. Therefore, it is not an Ethereum blockchain-based stablecoin.
So, stablecoins are so important, they are basically the foundation of the industry, which is why we need blockchain-based stablecoins first. LUNA is a blockchain-based stablecoin. Therefore, LUNA is a blockchain token, with which he can create UST. But the problem with LUNA and UST is that there is only one correlation. Basically, all USTs are LUNA-based and 100%, so I think this kind of vicious cycle has occurred…”
At the time of writing, USDD has a market capitalization of $747 million. It briefly lost its peg for a few weeks in June of this year, but has since traded steadily at $1.
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Featured image: Shutterstock/Yurchanka Siarhei/Andy Chipus
