Under Justin Sun's leadership, Tron has launched USDD 2.0, an updated algorithmic stablecoin offering an enticing 20% APY. Stability is ensured by Tron DAO reserves.
USDD 2.0 Backing and Collateral Details
Justin Sun clarified that the high yield is supported by the substantial reserves of Tron DAO. USDD 2.0 is backed by TRX and other assets, with a collateral ratio of 120%. For the circulating supply of $747 million, the reserve totals $2.6 billion.
How Tron DAO Generates High Yields
Addressing sustainability concerns, Sun stated, “We have ample funds. Stop asking where the yield comes from.” This response aims to allay doubts about the viability of USDD 2.0's high returns.
USDD 2.0’s Place in the Stablecoin Market
With a 20% APY, USDD 2.0 positions itself as one of the highest-yielding stablecoins in the market, competing with DAI and USDC. Despite criticism, Tron and Justin Sun remain optimistic about the future of USDD 2.0, as reflected in the TRX rise. The stablecoin market, dominated by USDT and USDC, exceeds $215 billion, with algorithmic stablecoins accounting for $13 billion. Despite a smaller share, USDD's over-collateralized model provides resilience.
The launch of USDD 2.0 marks a significant step in the evolution of stablecoins. The success of high-yielding models requires careful assessment of risks and opportunities.
