Justin Sun's USDD Could be Another UST?

almost 3 years ago

USDD is another algorithmic stablecoin aiming to maintain the price closely to 1 USD.

The price of USDD if increases above the peg, TRX worth 1 Dollar is minted/ burned for USDD 1, which reduces the supply TRX and increases USDD supply.

On the other hand, when the price of USDD falls, USDD 1 gets burned for USD 1 worth of TRX thus reducing the supply of USDD and increasing TRX supply.

Tron DAO is believed to be backing up USDD in times of market crash which may cause it's crash and it will accumulate Billion Dollars of Bitcoin, TRX and other stablecoins in reserve.

USDD Another UST?

USDD and UST both are the algorithmic stablecoins which are not backed by any collateral. After the recent crash of UST, stablecoin investors are now skeptical of the stablcoins specially the algorithmic stablecoins.

Source

Justin Sun was under criticism for his algorithmic framewor of USDD just like UST.

The reserve that are put aside to back up the USDD is same like the UST which also had planned of having billions of dollars reserve in LFG for the back up.

Justin Sun backs up his stablecoin that USDD has operational difference to that of UST.

Fate of USDD

Well, we don't know what the fate of USDD would be, but seeing algorithmic stablecoins not succeeding so far, and the considering the similarities of USDD and UST, it would make sense that USDD may suffer the same as UST had recently.

Now, seeing the deep pockets of Justin Sun and Tron, they do look deeper than Do Kwon and the LFG meaning that their ability of maintaining the dollar peg is likely to be higher.

But, now that here is a very public playbook of how to attack the stablecoin like this one, the chance of attacks may increase more.

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19 comments

@aussieninja 70

almost 3 years ago

Justin Sun's arrogance probably surpasses Do Kwon's as well... so USDD does seem ripe for some whales to make some easy money forcing a significant depeg.

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@taskmaster4450le 81

almost 3 years ago

No value there whatsoever.

Shortcuts do not equate to building, which is where resiliency comes from.

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@howzat 67

almost 3 years ago

More like a wall of sand.

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@howzat 67

almost 3 years ago

I don't feel like most of investors may want to invest in USDD after seeing a devastating UST crash.

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@taskmaster4450le 81

almost 3 years ago

It could be. Until someone decides to build value instead of just taking short cuts, we are going to see a lot of these crash and burn.

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@howzat 67

almost 3 years ago

Yeah you are right.
I don't feel like most of the people would be trusting this as well.

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@luizeba 75

almost 3 years ago

!1UP

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@curation-cartel 52

almost 3 years ago

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@poshtoken 84

almost 3 years ago

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@hivebuzz 74

almost 3 years ago

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@jfang003 76

almost 3 years ago

I don't think Justin Sun is creative enough to make a successful stable coin and I would not be surprised if he copied some existing stable coin. Either way, if that is how his stable coins are, the network can definitely crash when the peg is broken.

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@howzat 67

almost 3 years ago

Users should proceed with caution.

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@rynow 73

almost 3 years ago

Scary, Although I am not invested in USDD, I hope this does not happen!!

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@howzat 67

almost 3 years ago

And I hope that people play safe.

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@rynow 73

almost 3 years ago

Agreed better to be safe than sorry!!

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@curatorcat.pal 65

almost 3 years ago

It's my impression that Justin is basically greedy and influence hungry like so many of these project founders are... and — as others have pointed out — he's just trying to invent another "shortcut" to something you can't really creat with shortcuts.

Sadly, I expect more than a few people will buy into the hype, but I'm also going to guess that most of them are "fast money" with absolutely no loyalty or staying power.

I'm certainly not touching that one.

=^..^=

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@howzat 67

almost 3 years ago

Other may also think twice before buying it as UST has already shaken trust of many.

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