USDD is a decentralized over-collateralized stablecoin pegged to the US dollar at a 1:1 ratio, supported by the TRON ecosystem (TRON DAO). As of November 2025, its market cap is approximately $425 million.

Core Mechanism and Innovation (USDD 2.0)

The USDD 2.0 version, upgraded in early 2025, introduces key innovations aimed at enhancing stability and decentralization:

Over-collateralization and Transparent Reserves: Value is backed by a diversified portfolio of cryptocurrencies (such as TRX, BTC, USDT, etc.) that exceed market value, with reserve status verifiable on-chain.

Price Stability Module (PSM): Allows USDD to be exchanged with stablecoins like USDT at very low fees, maintaining a $1 peg through arbitrage mechanisms.

Smart allocator: Automatically deploys protocol reserves to DeFi protocols like Aave and JustLend to earn yields, providing sustainable returns for stakers (APY was once as high as 20%), reducing reliance on external subsidies.

Safe liquidation mechanism: When the collateral rate falls below the safety line, an on-chain liquidation auction is triggered to ensure the system's solvency.

Recent major developments

Multi-chain expansion: USDD has been natively deployed on the Ethereum network, directly connecting to the largest DeFi ecosystem, with plans to expand to BNB Chain and others.

Incentive upgrade: Starting from December 20, 2025, USDD supply mining rewards will upgrade from a single token to a dual-token reward of 'USDD + TRX' to enhance incentives.

Ecosystem growth: A high incentive campaign was launched upon deployment to Ethereum. The underlying Tron network has a solid user and developer base, providing strong ecological support for USDD.

Market environment and prospects

Stablecoin market growth: By 2025, on-chain transaction volume of stablecoins is expected to reach 30%, with annual transaction volume exceeding $4 trillion, a year-on-year increase of 83%. The United States, as the largest market, saw transaction volume increase by approximately 50% in the first seven months of 2025.

Regulatory trends: Policies such as the (GENIUS Act) passed in the U.S. have established a clearer compliance framework for stablecoins, aligning with USDD's emphasis on transparency and over-collateralization.

Competitive positioning: In a market dominated by USDT and USDC, USDD attempts to establish a differentiated advantage in the decentralized stablecoin space through its decentralization, over-collateralization, and sustainable yield model.

Risks and challenges to note

Price decoupling risk: There remains a possibility of decoupling from the US dollar under extreme market conditions.

Centralization risk: On-chain data shows that USDD holdings are relatively concentrated, with the top five addresses holding nearly 68% of the supply, which may impact decentralization and market stability.

Regulatory and technological risks: Global cryptocurrency regulatory policies continue to change, while smart contract vulnerabilities and network congestion are also potential risks.
@USDD - Decentralized USD #USDD以稳见信