Crypto currencies are something of a hot topic these days, and stablecoin is one of the most popular among them. Tether (USDT) and Binance Coin (BNB) are the most famous stablecoins, and a new stablecoin, USDD (Decentralized USD), was launched in May 2022.
What kind of crypto currency is USDD, which coincidentally was launched just before the crash of Terra (LUNA)?
We will explain its features and future potential.
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What is USDD (Decentralized USD)?
| Name | USDD (Decentralized USD) |
| Token Symbol | USDD |
| Price | Fixed at $1 (Stable Coin) |
| Official page | https://usdd.io/#/ |
| https://twitter.com/usddio | |
| Telegram | https://t.me/usddio |
| Discord | https://discord.com/invite/usdd |
USDD (Decentralized USD) is a stable coin pegged to the US dollar. A stablecoin is a crypto currency whose value is linked to the legal tender, and USDD has the same value as one US dollar.
The main blockchain network is TRON (TRON), but by using the BitTorrent (BTT) cross-chain protocol, it is compatible with DEX of different blockchain networks. It is able to trade with many crypto currencies.
Perhaps because of such convenience, it ranked as high as 66th in the trading market ranking as of March 2023. It has become a popular stablecoin in less than a year since its launch.
Features of USDD (Decentralized USD)
There are several reasons why USDD became popular immediately after its launch. We will now introduce USDD’s features in detail.
Feature 1: Mechanism of price maintenance
There are three main mechanisms by which stablecoin maintains its price
- Legal tender-backed
- crypto Currency Collateralized
- Unsecured
USDD is an unsecured stablecoin. You may ask, “How can value be guaranteed when there is no collateral?” You may wonder, “How can the value be guaranteed without collateral?” Some stable coins, including USDD, use an algorithm to fix the price at $1.
Specifically, how it is adjusted is by basing the USDD price on TRX, Tron’s native token, and adjusting TRX’s price to keep the USDD price at $1.
For example, if the USDD value is less than $1, TRX is withdrawn using dollars in the protocol. In doing so, the value of TRX temporarily rises, and the value of USDD approaches $1 in tandem with it.
Conversely, if the value of USDD goes above $1, the dollars in the putrocol will be withdrawn, increasing the amount of TRX in circulation. The value of USDD will decrease in tandem with the temporarily decreased value of TRX, and the value of USDD will adjust to $1
USDD, which controls the supply-demand balance of TRX in this way and maintains its price, is a more reliable stablecoin than crypto currency-backed stablecoins as long as the mechanism is functioning.
Feature 2: Stablecoin with USDD Minimum Collateral Rate
In order for the protocol that keeps the value of USDD to function well, it requires that many assets. Since the price is adjusted by moving dollars and TRX in and out, it is natural that without assets, price adjustment would not be possible.
For this reason, USDD sets the minimum collateral ratio at 120% to ensure that USDD’s protocols operate safely.
Incidentally, this 120% minimum collateral ratio means that there are 120% of the total USDD assets currently in circulation as collateral. This means that even if all USDDs in circulation were to be traded in a short period of time, the value would not plummet because there would be sufficient assets.
In addition, all collateral assets have their entire portfolios published on the TRON DAO Reserve website. Unsecured stablecoins have been problematic due to the opaqueness of the assets used as collateral, but USDD has shown that this problem has also been improved.
Feature 3: High Yield Staking
Staking is a system in which a certain amount of interest is earned by holding the relevant crypto currency, and USDD’s staking yield is extremely high, set at more than 30% per annum.
In fact, when checking the staking yields, all pools promise yields of 30% or more, and the TRON network’s DEX can expect yields of up to 61%.
However, staking yields are very low on the Ethereum and BNB networks, so be sure to choose the TRON network when participating in staking.
Also, no matter how safe USDD is as a stable coin, you should not place too much trust in it. High yields come with their own risks, so be sure to fund your participation in USDD staking with surplus assets.
USDD (Decentralized USD) Price Trends
USDD is a stable coin, so its price is basically fixed at $1. However, as mentioned earlier, due to its characteristic of automatically adjusting its price using an algorithm, the price may fluctuate temporarily.
In fact, looking at the chart, the highest price in the recent past was $1.1 and the lowest price fluctuated to $0.93. Nevertheless, USDD is a very good stable coin, with fluctuations limited to a maximum of 10% up or down.
How to Buy USDD (Decentralized USD)
To purchase it, you can use crypto currency exchanges or the DEX.
However, in order to use crypto currency exchanges or DEX, you need to prepare a major crypto currency as an exchange source.
If you don’t know how to prepare crypto currency, please refer to the following method to try purchasing crypto currency.
How to purchase crypto currency using bitcastle
A simple and easy way for beginners to purchase crypto currency is to use bitcastle. bitcastle allows you to purchase crypto currency with a credit card. There is no need for cumbersome bank transfers or money transfers from an online banking account.
The procedure for purchasing crypto currency using bitcastle is as follows
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- STEP.01Register
- Enter your email address to open an account.
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- STEP.02Select
- Select bitcastle payment service
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- STEP.03Purchase
- Purchase crypto currency using the selected payment service.
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- STEP.04Confirmation
- Confirm that the purchased crypto currency is reflected in bitcastle.
This is all you need to do to purchase crypto currency. Apple Pay and Google Pay are also available for some payment services, so if you do not want to use a credit card, you can use these payment services.
By the way, bitcastle registration is easy and requires only an email address. You will need to verify your identity in order to use all the features, but it only takes a few minutes to create an account.
There is no fee to open an account, so if you do not have an account yet, please try to create one.
The Future of USDD (Decentralized USD)
In conclusion, we can say that the future of USDD is very promising. There are three reasons for this
Stablecoin use cases are increasing
High trustworthiness despite being an unsecured stablecoin
High staking yield makes it a valuable investment asset
These factors lead us to speculate that USDD is a crypto currency that will become quite popular in the future.
Increasing Use Cases for Stablecoins
In the past, the image of a stablecoin was that of “a crypto currency with relatively stable value in a highly volatile crypto currency market. Since the beginning of 2021, however, this perception has gradually changed, and stablecoins are now seen as “an asset that can replace currencies.
For example, JPYCs pegged to the Japanese yen can now be used for payment at Matsuya Ginza(Department name in Japan), and Defi uses them for crypto currency lending and yield farming.
Thus, stablecoin, which can now be used to make purchases in real life and transfer assets on the network, is attracting attention as a seamless asset.
Although the name “stablecoin” is not very well known at this time, it will eventually become a word you hear often. In light of these trends, USDD is a highly promising stablecoin.
Uncollateralized Stable Coin with High Credibility
Although USDD is an unsecured stablecoin, it is a highly reliable stablecoin. Therefore, it has fewer assets as collateral than legal tender-backed stablecoins, and yet it has a high issuance limit.
If a large number of USDDs flow into the market and a large number of users become holders, services that give preferential treatment to USDDs will naturally emerge.
It is easy to predict that as the volume of circulation increases, the stablecoin will become relatively more valuable than other stablecoins. If there is a possibility that as stable coins become more popular, they may become superior to each other, USDD is a crypto currency with an exciting future.
High staking yield makes it a valuable investment asset.
Staking is very attractive for stablecoins, which cannot be expected to earn a profit from trading, as interest can be expected just by holding them. There is no other investment product that offers such a high interest rate with such a small risk of price fluctuation.
USDD is a reliable and high-yielding stable coin. With interest rates in excess of 30%, stable coins are an ideal investment for those with excess assets.
Of course, it is unclear whether the interest rate will remain the same, but USDD is expected to have a high yield in the foreseeable future, and the number of holders of long-term holdings will increase in the future.
Summary;USDD is a promising stable coin with a promising future.
Finally, let us briefly summarize USDD.
- USDD is a stablecoin pegged to the US dollar
- The main network uses TRON.
- Unsecured stablecoin
- Collateral assets maintain a minimum of 120% of the number of issues
- Staking yield is very high at 30%.
From this alone, it is clear that USDD is an attractive stablecoin. It is no wonder that many users became holders immediately after the launch.
However, one should not become a holder easily. I did not mention risks this time because there were no major concerns about USDD, but stablecoin is a crypto currency, so potential risks are always present.
It is important to understand that it is very risky to hold a large amount of assets in USDD just because it is “stable.”