Justin Sun, the founder of Tron, has reassured users about the stability of the USDD stablecoin despite a recent significant withdrawal of Bitcoin reserves.
On Wednesday, the Tron DAO Reserve removed nearly $750 million in Bitcoin from USDD’s backing, shifting the stablecoin’s support primarily to Tron’s own token, TRX.
Sun clarified that the withdrawal was due to USDD’s excessive collateralization, which had exceeded 300%. He explained that the stablecoin’s design allows for the withdrawal of excess collateral without needing approval, similar to MakerDAO’s DAI system.
The move has reignited scrutiny over USDD’s governance and Sun’s role. Critics point out that despite being governed by a DAO, USDD’s decision-making has been highly centralized, with minimal community involvement. The announcement about the withdrawal came from Sun’s personal account rather than from the Tron DAO Reserve, leading to additional concerns.
USDD is currently backed by $1.7 billion in TRX and USDT, giving it a collateralization ratio of over 230%. However, Bluechip, a stablecoin rating agency, has questioned the true collateralization level, suggesting it may be as low as 53% due to the transfer of reserves to Huobi and the use of a multi-sig wallet.
With about $744 million worth of USDD tokens in circulation, the stablecoin remains one of the top digital assets by market cap. Despite this, the lack of transparency and governance issues have led to ongoing skepticism among investors.
Tether is deepening its involvement in the tokenized gold space by introducing a new version of its gold-backed stablecoin—XAUt0—on The Open Network (TON).
Altcoins may be heading for deeper losses against Bitcoin, according to crypto market analyst Benjamin Cowen, who sees no signs of reversal in the broader trend.
Robert Kiyosaki, author of Rich Dad Poor Dad, has raised alarm bells once again—this time warning that the financial system may already be in the early stages of a historic downturn.
Robinhood has officially announced the acquisition of Bitstamp, one of Europe’s longest-standing digital asset exchanges.