Stablecoin USDD will not repeat the history of UST

The CEO of Tron says that its stablecoin will not follow in the footsteps of UST.

Well-known crypto entrepreneur Justin Sun, who created the 16th largest altcoin, ensures that the algorithmic stablecoin belonging to his project is much safer than the one that passed into the infamous past as a result of the defeat of Terra. This year's loss of link to the US dollar by UST and some USDT problems have made investors around the world be very careful when interacting with stablecoins.

Justin Sun says USDD won't repeat a UST-like story

The epic failure of the Terra project and its UST stablecoin has left its mark on the entire virtual currency industry. For obvious reasons, due to these events, investors began to approach similar cryptocurrencies with much more caution.

Although the USDD stablecoin issued by Tron DAO Reserve has many similarities to UST, Justin Sun is making intense efforts to reassure market observers that his stablecoin will not follow Terra's footsteps. One of the important arguments he mentioned was that his 'stable' cryptocurrency uses a hybrid model where minting and burning of new coins is possible using various assets, including USDT and USDC.

"We use a lot of stablecoins from the market to guarantee decentralization" - emphasized the founder of the Tron project in an interview with CoinGecko. When Justin Sun was asked about the reasons for the spectacular collapse of UST, he explained that the main problem with this project was over-correlation with one asset - the LUNA cryptocurrency.

During the interview, Justin Sun also used this opportunity to clarify the USDD "over-collateral" issue. He noted that it exceeds the supply of this stablecoin, so its holders do not have to worry about not being able to cash it.

Moments later, Sun stated, "Right now, the overall hedge for USDD is 300%, so it's very healthy."

According to data from tdr.com, the supply of USDD stablecoin exceeds 747.5 million coins and is secured by over USD 2.3 billion, which currently include coins such as TRX, BTC, USDT and USDC.