TRON network announces its entry into the algorithmic stablecoin market with USDD.
Justin Sun, Founder of TRON, announced today in an open letter that a new stablecoin is launching on the TRON blockchain, USDD (or Decentralized USD), marking its official entry into the decentralized stablecoin market.
According to the announcement, USDD will not rely on any centralized institutions for storage and management. Instead, it will achieve full on-chain decentralization through a decentralized autonomous organization (DAO) called Tron DAO.
USDD protocol will keep USDD stable at 1: 1 peg against the US dollar. It won’t operate like traditional stablecoin like USDT or USDC which keep dollars and other assets in bank accounts. Instead USDD will be an algorithmic stablecoin like UST from Terra or Frax from Frax Finance. USDD will be pegged to the underlying asset, TRX, and issued in a decentralized manner.
He also announced that Tron DAO will build a reserve of $10 billion as collateral to back his stablecoin. Tron DAO will partner with other blockchain industry leaders to establish and manage USDD reserves.
USDD is scheduled to launch on May 5, 2002 on Tron blockchain. It will also be available on Ethereum & BSC chains through the BitTorrent Chain cross-chain protocol.
Let's see how the market will response to new venture.