Justin Sun Removes USDD Stablecoin’s $726M BTC Collateral, Now Backed Primarily by TRX
Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...
The USDD stablecoin, issued by the TRON DAO Reserve, has seen the removal of 12,000 Bitcoin, valued at approximately $726 million, from its collateral.
The move has left USDD primarily backed by TRX, the native token of the Tron blockchain, raising concerns among the communty.
The change, first noticed on social media platform X, was made without any official announcement from the TRON DAO.
lmao @justinsuntron silently removed the 12.000 btc as USDD collateral recently and it's now 100% backed by tron (except for 20mil. usdt).
This was the address: 1KVpuCfhftkzJ67ZUegaMuaYey7qni7pPj
In response to the reports, Tron founder Justin Sun took to X to explain that the operation is “not mysterious.”
According to Sun, any collateral holder has the freedom to withdraw funds without requiring approval, likening USDD’s mechanism to that of MakerDAO.
Sun also acknowledged that USDD, which currently maintains a “long-term collateralization rate” exceeding 300%, is not capital efficient.
He hinted at future upgrades to the stablecoin, aiming to enhance its competitiveness in the decentralized finance (DeFi) market.
However, Sun’s comments did not clarify the extent of the TRON DAO’s involvement in the decision to remove Bitcoin from the collateral.
Regarding the decentralized stablecoin USDD, its mechanism is similar to MakerDAO's DAI and is not mysterious. When your collateral exceeds the amount specified by the system (usually between 120%-150% depending on the vault), any collateral holder can withdraw any amount freely…
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