Decentralized network Tron has become the latest to join the stablecoin fanfare. The network’s creator, Justin Sun, has announced plans to create and issue a new algorithmic stablecoin USDD.
The announcement, unsurprisingly, pushed the network’s native token TRX price upwards of 20%. At press time, the currency was trading at $0.068 with a 24-hour price change of 2.28%.
In a blog post issued Thursday, Justin Sun revealed plans to issue a fully decentralized algorithmic stablecoin called USDD. The UST-like currency will maintain the value of the US Dollar with the help of TRX, regardless of the market conditions.
“When USDD’s price is lower than 1 USD, users and arbitrageurs can send 1 USDD to the system and receive 1 USD worth of TRX. When USDD’s price is higher than 1 USD, users and arbitrageurs can send 1 USD worth of TRX to the decentralized system and receive 1 USDD,” the company’s press release read.
To help with the process, Tron DAO will also set up and manage a reserve worth $10 billion with a 30% interest rate from “prominent blockchain industry players.” While the Tron foundation has not revealed the collateral assets, Sun said the reserve will hold “highly liquid assets” to back the stablecoins.
Happy to collaborate with #UST and #LUNA! #UST #USDD pool will be awesome! 🤝 https://t.co/5dgrO8xwgu
— H.E. Justin Sun 🅣🌞🇬🇩 (@justinsuntron) April 21, 2022
USDD will also be available on Ethereum and BNB Chain in addition to Tron, using the BTTC cross-chain protocol. According to the release, a well-known institution in the blockchain industry is preparing to accept the USDD stablecoin.
Tron’s latest stablecoin project is strikingly similar to Terra’s UST reserve initiative, wherein the network will accumulate $10 worth of Bitcoin and crypto reserve to back its algorithmic stablecoin UST. So far, the Luna Foundation Guard has acquired $1.7 billion in Bitcoin, $549.84 million in USD-denominated stablecoins, and $14.74 million in Terra.
