Tron founder Justin Sun has announced that the blockchain is launching a decentralized algorithmic stablecoin from May 5.
USDD will be supported by Tron’s native token and pegged to the dollar with $10 billion in TRX set as collateral.
The stablecoin will reportedly be algorithmically pegged like TerraUSD and Frax Finance and will not keep assets in bank accounts as reserves unlike USDT.
The system will work so that when the USDD price drops lower than 1 USD, users can transfer 1 USDD to the system and get 1 USD worth of TRX token. When the USDD value is higher than 1 USD, users and arbitrageurs can send 1 USD worth of TRX to the system and receive 1 USDD.
The stablecoin will be available on Ethereum and BNB Chain through the BitTorrent network’s cross-chain platform and the $10 billion reserves will be managed via Tron DAO.
Near Protocol is another blockchain that has announced plans to launch its own stablecoin similar to UST.
Source: H.E. Justin Sun