Recently, UST and LUNA have received the most attention in the cryptocurrency market, particularly in light of LUNA’s collapse, which has caused investors to be cautious of algorithmic stablecoins. However, a new stablecoin called USDD debuted on TRON’s platform, especially on May 5, 2023. What is USDD precisely, then? How does this stablecoin function, then? Let’s find out a little about USDD with Cove Markets!
What is USDD (USDD)?
USDD is essentially a TRON protocol algorithmic stablecoin. TRX is used to support USDD. Said, a unique algorithm developed by TRON will ensure that the USDD value remains constant at $1. In contrast to more traditional stablecoins like USDT or USDC, USDD is an asset class that is long-term guaranteed.
Background of USDD
On May 5, 2023, Justin Sun released USDD (Decentralized USD), an algorithmic stablecoin (Algorithmic Stablecoin), on the Tron DAO Reserve (TRX) platform. For USDD, all redemption, management, and storage operations will be carried out on-chain without a centralized entity. In particular, USDD will be released entirely decentralized and tied to the underlying asset of TRX.
The USDD stablecoin will be tied to the USD (fiat – American Fiat), which implies that USDD will be pegged at a 1:1 ratio to the USD, according to the information provided in the USDD Whitepaper.
How Does USDD Work?
Now that you know what USDD is, let’s learn more about how it operates and keeps its value. It is planned that TRON, Ethereum (ERC20), and Binance Smart Chain (BEP20) will all support the USDD stablecoin. Additionally, this digital asset was introduced with the aid of other significant blockchain partners. The USDD stablecoin, according to Justin Sun, will rank among the most decentralized stablecoins ever created. TRON combined all of its resources to build the USDD stablecoin. Since TRON is an algorithmic stablecoin with a solid mathematical algorithmic foundation, higher token prices will lead to the issuance of more tokens, lowering the value of TRON.
The USDD stablecoin is directly managed by TRON DAO and is set to be pegged to the U.S. dollar at a 1:1 ratio. This means that the value of this digital currency is tied to the value of the U.S. dollar. If you’ve ever invested in Terra’s UST, the USDD stablecoin works almost the same way. These are both algorithms for stablecoins. As an algorithmic stablecoin with a solid mathematical algorithmic foundation, higher token prices will result in additional tokens being issued to bring the TRON stablecoin value down.
For some other common stablecoins, such as USDT, to ensure stability, there needs to be collateral behind them. For USDD, an algorithm will be used to ensure stability. Set at $1. USDD guarantees a collateral ratio of over 130%. That means for every USDD in existence; there is at least 1.3 USD of collateral locked up.
When the stablecoin falls below the peg ratio, users can exchange one USDD for one U.S. dollar. When the price of the stablecoin goes above $1, you can trade one U.S. dollar for one USDD.
Read more: BEP2 vs BEP20 vs ERC20: Which Is The Best Choice For You 2023?
What Problems Does USDD Solve?
USDD solves many problems for businesses and individuals.
- For businesses, USDD provides a way to send and receive payments without worrying about chargebacks or fraud. USDD also allows companies to accept payments in multiple currencies, saving them money on foreign exchange fees.
- For individuals, USDD provides a way to send and receive payments without worrying about chargebacks or fraud. USDD also allows individuals to hold their money in multiple currencies, saving them on foreign exchange fees.
The USDD Team
TRON, led by Justin Sun, is the company behind USDD. Tron, a blockchain-based decentralized digital platform, created USDD (lagging only behind USDT and USDC) to duplicate the success of Terra UST, which at one point was the third-largest stablecoin by market size. Tron is not the new kid on the block, although USDD is. Justin Sun founded Tron in 2017, and its in-house digital currency, Tronix (TRX), is already well-known in the cryptocurrency industry. The network uses blockchain technology and its offshoots to hasten the decentralization of the internet.
Partnerships
Currently, Alameda Research, Amber Group, Poloniex, Ankr, Mirana, Multichain, FalconX and TPS Capital have joined as members of TDR and are whitelisted organizations. They will also act as advisors and make recommendations to develop, enhance, and provide support for the development of USDD.
What Is USDD Token?
USDD token is a stablecoin, a cryptocurrency whose value is pegged to the US dollar. USDD is an ERC20 token built on the Ethereum blockchain. It is backed by fiat reserves in a 1:1 ratio.
Basic Information About USDD
- Token Name: USDD
- Ticker: USDD
- Blockchain: Tron
- Token Standard: Tron
- Contract: TPYmHEhy5n8TCEfYGqW2rPxsghSfzghPDn
- Token Type: Utility
- Total Supply: 745,998,886
- The current circulating supply is 745,332,143.61 USDD.
Market Capitalization
- Today, the live price of USDD is $0.9974137
- Market cap of $743.40M.
- 24-hour trading volume is $34.38M.
Types Of USDD On Blockchains
The USDD stablecoin circulates on multiple blockchain networks via the cross-chain protocol BitTorrent Chain, including TRON, Ethereum, BSC, and others. Similar to TRC20-USDT, it caters to users’ needs by offering them a fast and affordable experience on TRON.
On TRON:
- Total Supply: 745,635,762.439469…
- Circulating Supply: 745,635,762.439469…
- Total Market Value: $745,635,762
- Market Cap: $745,635,762
On Ethereum:
- Token Standard: ERC-20
- Blockchain: Ethereum
- Contract: TPYmHEhy5n8TCEfYGqW2rPxsghSfzghPDn
- Max Total Supply: 123,017,920 USDD
On BSC:
- Token Name: USDD
- Ticker: USDD
- Token Standard: BEP-20
- Blockchain: BSC
- Contract: 0xd17479997F34dd9156Deef8F95A52D81D265be9c
- Total Supply: 110,581,328 USDD
How to Buy USDD Tokens?
- Go to the official USDD website https://usdd.network/
- Sign up for an account and verify your email
- Log in to your account
- In the dashboard, click on the “Buy Tokens” tab
- Enter the amount of USD you want to spend and click on the “Buy Now” button
- Complete the transaction using your preferred payment method
- The USDD tokens will be credited to your account immediately
On several significant centralized and decentralized exchanges, you can buy or trade USDD. KuCoin, Huobi Global, Binance, Poloniex, Gate.io, and Sunswap are a few instances.
For example, to buy USDD tokens on Binance, you need to go through the following steps:
- Step 1. Sign up on Binance. If you already have an account, then log in.
- Step 2. Click on the “Buy Crypto” tab.
- Step 3. Choose your country and payment method.
- Step 4. Enter the amount of USDD that you want to buy.
- Step 5. Click on the “Buy Now” button.
You will now see your USDD tokens in your Binance wallet.
Read more: Binance Vs BinanceUS Guide 2023: Which Exchange is Best?
How to Store USDD Coins?
To store USDD coins, you will need to use the Ethereum blockchain. Many wallets support this blockchain, so you should have no trouble finding one that meets your needs. We recommend using MyEtherWallet, which can be found at https://www.myetherwallet.com/
USDD (USDD) is on the Ethereum network (ERC-20), so it can be stored using any ETH-compatible wallet. There are guides to manage an unofficially supported ERC-20 token on Ledger and Trezor. You can connect your Ledger or Trezor to MyEtherWallet or MyCrypto.
After buying coins, you can store them on exchanges, but a dedicated wallet is safer and better for long-term storage. Hardware wallets are the safest way to store money but cost money. They are the best choice for people who want to store a lot of money or keep it for a long time.
You can use hardware wallets to store USDD coins like Ledger Nano S, Trezor One, or other wallets like Exodus, Coinomi, and Trust Wallet.
Read more: Best Crypto Wallets For Storing Coins In 2023: Hot Wallets & Cold Wallets
What Are The Risks Involving In USDD?
There are a few risks involved in USDD, but nothing should discourage you from using it.
- First, if you lose your phone or it is stolen, anyone who has access to your phone will be able to access your USDD account.
- Second, if you forget your PIN or password, you will not be able to access your account or reset it.
- Finally, if you do not have a backup of your account, you will lose all of your USDD if your phone is lost or stolen.
The Crash of UST and its Impact on USDD
The Crash of UST caused the USDD to lose its status as the primary international reserve currency. This led to a decrease in demand for USDD, which in turn reduced its value. The decline in the value of USDD caused a domino effect on the Crypto market. This caused a loss in trust of USDD, which slightly led to a reduction in demand for USDD.
What If USDD Collapses?
If USDD were to collapse, it would likely significantly impact the US economy. The value of the US dollar would plummet, and inflation would skyrocket. This would lead to a recession, as people would no longer be able to afford to buy goods and services. The stock market would also crash, as investors would lose confidence in the US economy.
Advantages and Disadvantages
Advantages:
- It gives a return of 20% per year (APY).
- It is stable in price and has functional use features.
- It has a built-in mechanism to incentivize responsive monetary policy.
- It will be truly accessible with far-reaching effects.
- TRON’s decentralized stablecoin is protected by the DAO Reserve, ensuring price stability.
Disadvantages:
- The risks of stablecoins became apparent after the collapse of Terra’s stablecoin, TerraUSD (UST).
- The risk factor is high, as with other crypto projects.
Read more: TOP 8 Best Stablecoins To Trade &; HODL In 2023: A Full Guidance For Beginners
FAQs
Why USDD instead of USD?
USDD is a dollar-backed stablecoin, meaning each USDD in circulation is backed by one U.S. dollar held in reserve. USDD can be used to send, receive, and store value on the Ethereum and Tron blockchain.
How to earn USDD tokens?
USDD tokens can be earned by participating in the decentralized governance of the USDD stablecoin. Holders of the USDD token can vote on critical decisions that will determine the future of the stablecoin, such as which blockchain it should be built on, what its monetary policy should be, and more.
Besides, you can buy USDD on the exchange after launch or generate it by burning TRX.
Why is USDD popular?
USDD is popular because it is a stablecoin pegged to the US dollar. Each USDD token is worth one US dollar, making it a popular choice for traders who want to trade in a stable currency.
What can I buy with USDD?
USDD is a stablecoin that is pegged to the US dollar. This means that one USDD is worth one US dollar. You can use USDD to buy other crypto like BTC, ETH, BNB and goods or services (if they are available).
How can I find more information about USDD?
The best way to find more information about USDD is to check out their website. You can also find them on social media, such as Facebook and Twitter.
Conclusion
Now that you understand what USDD is, you can decide whether it’s the right stablecoin for you and your crypto portfolio. Although it’s relatively new, it has some unique benefits that could be valuable in the future. UST is also an algorithmic coin, which can be the foundation of your USDD investments if you know how to use it effectively.
Information about USDD updates above is not investment advice. Follow Cove Markets to stay up-to-date on valuable articles about the Crypto market. Good luck with your investments!
Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.
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