TRON to Launch $10B Crypto-Backed Stablecoin in May: Founder Justin Sun

TRON to Launch $10B Crypto-Backed Stablecoin in May: Founder Justin Sun

TRON plans to launch its own algorithmic stablecoin called USDD, or decentralized USD, on May 5, according to founder Justin Sun.

USDD will be backed by about $10 billion in “highly liquid” crypto assets as collateral to help maintain its US dollar peg, the 31-year-old crypto tycoon announced on April 21. TRX, the native token of the TRON blockchain, will also help keep the peg.

Sun did not say which assets would act as collateral for his new cryptocurrency, which takes on the form of Terra’s UST or Frax Finance’s FRAX.

USDD using ‘proper algorithms’ to maintain a dollar peg

He explained how the USDD’s “proper algorithms” will prevent the stablecoin from losing its peg against the dollar “regardless of market volatility.”

“When USDD’s price is lower than $1, users and arbitrageurs can send 1 USDD to the system and receive $1 worth of TRX,” said Sun in an open letter published on his personal website.

According to Sun, the stablecoin will be managed by the TRON decentralized autonomous organization, or DAO, which will oversee a new reserve with a 30% interest rate.

The TRON founder said USDD will be available on Ethereum (ETH) and BNB Chain through the BitTorrent network’s cross-chain protocol.

Commenting on the news, Terra founder Do Kwon said “decentralized economies deserve decentralized money.” He added that “every blockchain will run on decentralized [stablecoins] soon.”

Terra (LUNA) said in March that it will buy up to $10 billion in bitcoin (BTC) as partial backing for its UST stablecoin. It is an interesting coincidence that Sun’s TRON appears to be following a similar playbook.

Sun launches decentralized reserve to ‘safeguard’ crypto industry

Meanwhile, Justin Sun revealed he had set up the TRON DAO Reserve, in many ways an entity with goals similar to those of the U.S. Federal Reserve or other central banks tasked with helping to reduce risk in financial markets.

“[The Reserve] aims to safeguard the overall blockchain industry and crypto market, prevent panic trading caused by financial crises, and mitigate severe and long-term economic downturns,” Sun wrote in a second letter.

“It also intends to formulate and implement monetary and exchange rate policies, play the role of a lender of last resort, and maintain reserve assets of various blockchains or blockchain-powered financial institutions to minimize systemic risks and ensure the stability of the financial market,” he added.

Critics warned to take Sun’s proposition with a pinch of salt. “The announcement should be perceived more as the discussion starter than the real solution,” Brian Pasfield, CTO of Fringe Finance, told Be[In]Crypto.

“Justin is known for making hype statements and his (and TRON network) reputation will not allow him to lead such kind of project.”


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Source link

Be the first to comment

Leave a Reply

Your email address will not be published.