What is USDD?
USDD is a stablecoin pegged to the US dollar, operating primarily on the TRON network. After the protocol upgrade, the token is issued under an over-collateralization model: a user locks crypto assets worth more than the issuance amount.
How it works
Price stability is maintained through collateral requirements and a liquidation mechanism: if the collateral value drops below the set threshold, the position closes automatically. The protocol also offers enhanced rates for placing USDD in savings modules, incentivizing demand for the token within the ecosystem.
Pros and cons
- Pros: low TRON network fees, collateral model instead of purely algorithmic, income programs for holders.
- Cons: history of peg deviations, governance concentration around one ecosystem, less market confidence compared to leaders.