Tron is launching a stablecoin on May 5th

in #tron3 years ago

It's called USDD (which stands for U.S. Decentralized Dollar).

Here is some more info about it:

https://www.msn.com/en-us/money/savingandinvesting/trons-stablecoin-launch-could-be-a-significant-catalyst/ar-AAWGNNA?ocid=uxbndlbing

The Tron stablecoin will be algorithmically backed in a similar manner to Terra's TerraUSD (CRYPTO: UST) stablecoin. Fiat-backed stablecoins such as USD Coin (CRYPTO: USDC) are backed by an equivalent dollar amount in the bank. On the other hand, algorithmically backed stablecoins are not backed by physical dollars but instead utilize algorithms to balance supply and demand by incentivizing traders to keep the coin's price stable. Here's how it works: If USDD falls below its peg to $1, traders can exchange 1 USDD token for $1 worth of Tron. If USDD rises above $1, traders can exchange $1 worth of Tron for one USDD. In theory, accruing these small but guaranteed returns should mean high-frequency traders and arbitrage traders should be able to maintain USDD's price within a narrow band around $1.

Tron is upping the ante and offering 30% interest on USDD, which will reportedly launch on May 5th. It's doubtful that USDD will supplant TerraUSD or that Tron is even trying to so (in fact, Terra founder Do Kwon has even voiced support for Tron's move), but it is likely that this will attract more crypto investors into the Tron ecosystem.

Sun says USDD will be backed by $10 billion worth of other cryptocurrencies to bolster confidence in its stability, although it is not clear at this time which cryptocurrencies this collateral will be.

This explains why both Tron and Steem rose in price last week - Steemit is an indirect way to earn Tron.

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