TRON DeFi Surges on Terra-Inspired Stablecoin Launch - Aliens: AI Crypto News & Markets Updates












TRON DeFi Surges on Terra-Inspired Stablecoin Launch

Crypto Briefing

Tue, May 24, 2022


Aliens TLDR

TRON's USDD employs a similar stabilization mechanism as Terra's UST stablecoin, which suffered a $40 billion death spiral earlier this month.

Less than a month after launching USDD, an algorithmic stablecoin that uses a similar mechanism to Terra’s collapsed UST, TRON has become the third-largest blockchain by total value locked in its DeFi protocols.

Despite the relatively shaky market conditions permeating the DeFi sector following Terra’s collapse earlier this month, TRON’s ecosystem of decentralized applications is thriving, at least in terms of total value locked.

The most likely reason TRON’s ecosystem has surged is the rapid growth of its recently launched stablecoin, USDD, which has promised investors a “risk-free” 30% interest rate.

According to its whitepaper , USDD is designed to be a “cryptocurrency issued by the TRON DAO Reserve with a stable price” with a “built-in incentive mechanism and a responsive monetary policy.” This mechanism allegedly allows the asset “to self-stabilize against any price fluctuations,” similar to how Terra’s LUNA token and Bitcoin reserves were meant to stabilize UST before it imploded.

Similar to Terraform Labs’ plan to raise $10 billion in Bitcoin to protect UST’s peg amid extraordinary market volatility, the TRON Foundation has created the TRON DAO Reserve with the same goal: to raise $10 billion in capital to protect USDD’s peg.

#USDD #TRONDAOReserve — H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) April 21, 2022 To incentivize users to mint and stake the stablecoin across various DeFi applications on TRON, the network’s controversial founder Justin Sun has promised a 30% “risk-free” interest rate on USDD.

Most of the USDD supply is locked in various DeFi protocols on the TRON network.

While the USDD launch has helped TRON over the past few weeks, it’s worth noting that the TRON DAO Reserve, USDD’s official “custodian,” has failed to highlight any of the risks associated with its new algorithmic stablecoin anywhere in its official documents or public communications.

Read full article on Aliens appRead from Original Source

The best experience is on the app

Everything happening in the crypto world, in real time


Recommended Stories

Article list item background

Ethereum sees the highest P/L ratio in 5 weeks, thanks to…

Ethereum [ETH] has had a difficult journey in 2022. The altcoin saw a peak drawdown of -79.5% from its ATH, placing its most sell-off within the upper bound of previous bear market floors. In fact, analysts have highlighted the growing “wall of worry” surrounding ETH’s atmosphere… …so what’s in store now? A sense of relief […]
AMB Crypto



Recommended Stories


Jed McCaleb Now Has 114 Million XRP Left: Report


Harmony Offers $1M Bounty After Discovering $100M Altcoin Hack


DOGE and SHIB Price Analysis for June 26


BNB Chain: Despite unimpressive metric data, BNB witnessed some massive gains on this front


Here Is When Shiba Inu Burn Portal Rewards Might Be Shared: Details


This Week on Crypto Twitter: Pussy Riot vs. UkraineDAO and SBF Bails Out BlockFi


Stepn Returns to Crypto Market Top with 75% Price Spike in Last 7 Days

The best experience is on the app

Download app to discover exclusive content, live market updates and more.

Get smarter and richer with the Aliens Crypto Digest

Stay informed and entertained, for free.

Follow Aliens