TRON DAO Reserve's USDD stablecoin has lost its Bitcoin backing. The move was spotted on social media Tuesday. It's left USDD relying mainly on TRX, Tron's native token.
A whopping 12,000 BTC vanished from USDD's collateral address. That's about $726 million gone. No official announcement came from TRON DAO.
Tron founder Justin Sun brushed it off on X. "Not mysterious," he said. Sun compared it to MakerDAO's operations. He claimed USDD wasn't capital efficient.
"Any collateral holder can withdraw any amount freely," Sun wrote. He boasted of USDD's "long-term collateralization rate" exceeding 300%.
USDD started life as an algorithmic stablecoin. It was similar to Terra's ill-fated UST. After UST's epic crash in May 2022, USDD switched to a hybrid model. It was backed by Bitcoin, TRX, USDT, and USDC.
Sun hinted at future upgrades. He wants USDD to be "more competitive" in the market. But he didn't address the DAO's role in the recent change.
USDD's market cap sits around $744 million, per CoinGecko. It's barely clinging to a top 100 spot. PayPal's new PYUSD stablecoin recently overtook it.
TRX is now USDD's main backer. It's more volatile but holds a top 10 spot, excluding stablecoins. TRX is trading at $0.15, more than double its value a year ago. Its market cap? A cool $13.5 billion.
Tron's been riding the meme coin wave lately. Sun's been pushing TRX hard as a meme coin marketplace. It's paid off big time.
The Tron ecosystem's total value locked (TVL) just surpassed Solana's. It's now the second-largest blockchain by TVL. We're talking $8.2 billion across 30+ DeFi protocols, according to DeFi Llama.
This USDD shake-up is a big gamble. Sun's betting on TRX's meme coin momentum. But ditching Bitcoin backing? That's a bold move, Cotton. Let's see if it pays off for them.