Home » Others » Justin Sun Addresses Concerns After Tron Removes $750M in Bitcoin from USDD

Justin Sun Addresses Concerns After Tron Removes $750M in Bitcoin from USDD

23.08.2024 10:30 2 min. read Alexander Stefanov
SHARE: SHARES
Justin Sun Addresses Concerns After Tron Removes $750M in Bitcoin from USDD

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.

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.

Telegram

SHARE: SHARES
More Bitcoin News
No Comments yet!

Your Email address will not be published.