Justin Sun's USDD Stablecoin Expands to Ethereum, Promising Stability and High Yields

Justin Sun's algorithmic stablecoin, USDD, has officially launched on the Ethereum network, marking a significant expansion for the asset. This move aims to leverage Ethereum's vast decentralized finance (DeFi) ecosystem to enhance USDD's accessibility and utility.

Key Takeaways

• USDD, backed by Tron founder Justin Sun, is now natively available on Ethereum.

• The launch includes a Peg Stability Module (PSM) for seamless 1:1 swaps with USDT and USDC.

• An airdrop campaign offers up to 12% APY to attract early adopters.

Expansion to Ethereum

The USDD team announced the native deployment on Ethereum, calling it a "key milestone" in the stablecoin's journey toward becoming a multi-chain asset. This expansion into the largest smart contract ecosystem is intended to bring greater stability and scalability to USDD.

Peg Stability Module and Airdrop

To ensure efficient liquidity and price stability, USDD on Ethereum will feature a "Peg Stability Module." This module allows users to mint and swap USDD against USDT and USDC with minimal slippage. Furthermore, an "exclusive airdrop" for early adopters commenced, offering users the potential to earn up to 12% annual percentage yield (APY) through tiered rewards. These rewards are distributed periodically, aiming to incentivize adoption and participation.

Background and Market Position

USDD was initially launched by the TRON DAO Reserve in May 2022, during the collapse of the algorithmic stablecoin UST. The stablecoin utilizes a combination of smart contracts, over-collateralization, and market mechanisms to maintain its peg to the U.S. dollar. In August 2024, the Tron DAO Reserve removed a significant portion of Bitcoin backing USDD, making Tron's native token, TRX, the primary collateral. Despite these measures, concerns about USDD's decentralization and collateralization have been raised by rating agencies.

USDD faces substantial competition in the stablecoin market, dominated by established players like Tether. While USDD's market cap is considerably smaller, its expansion onto Ethereum, the primary hub for stablecoins, signals an ambition to capture a larger share of the market by integrating with Ethereum's extensive DeFi infrastructure.

Sources

• USDD, the Justin Sun-backed stablecoin, launches natively on Ethereum, The Block.

• USDD by Justin Sun Launches on Ethereum with Peg Stability Module, CoinCentral.