USDD — another unstable stablecoin?

USDD, the decentralized algorithmic stablecoin based on Tron network has been growing since it launched earlier this month.

Its market capitalization currently hovers around $602m and continues to grow steadily despite the bearish market and UST’s crash. Its growth can be mainly attributable to one reason: promising high yields that are higher than Anchor’s.

What is USDD?

USDD is a cryptocurrency, branded as a decentralized stablecoin protocol launched on Tron network. According to its whitepaper, it is launched by the TRON DAO Reserve with a native incentive mechanism to self-stabilize against any price fluctuation.

How does USDDD achieve price stability?

USDD is issued natively on Tron, with TRX as the blockchain’s native token.

The USDD protocol uses TRX as the base currency to price USDD and targets a stable price of 1 USD. When USDD’s price is less than 1 USD, users and arbitrageurs could swap 1 USDD to 1 USD worth of TRX in the protocol.

Conversely, when USDD’s price is greater than 1 USD, users and arbitrageurs could swap…