Justin Sun's USDD Could be Another UST?
USDD is another algorithmic stablecoin aiming to maintain the price closely to 1 USD.
The price of USDD if increases above the peg, TRX worth 1 Dollar is minted/ burned for USDD 1, which reduces the supply TRX and increases USDD supply.
On the other hand, when the price of USDD falls, USDD 1 gets burned for USD 1 worth of TRX thus reducing the supply of USDD and increasing TRX supply.
Tron DAO is believed to be backing up USDD in times of market crash which may cause it's crash and it will accumulate Billion Dollars of Bitcoin, TRX and other stablecoins in reserve.
USDD Another UST?
USDD and UST both are the algorithmic stablecoins which are not backed by any collateral. After the recent crash of UST, stablecoin investors are now skeptical of the stablcoins specially the algorithmic stablecoins.
Justin Sun was under criticism for his algorithmic framewor of USDD just like UST.
The reserve that are put aside to back up the USDD is same like the UST which also had planned of having billions of dollars reserve in LFG for the back up.
Justin Sun backs up his stablecoin that USDD has operational difference to that of UST.
Fate of USDD
Well, we don't know what the fate of USDD would be, but seeing algorithmic stablecoins not succeeding so far, and the considering the similarities of USDD and UST, it would make sense that USDD may suffer the same as UST had recently.
Now, seeing the deep pockets of Justin Sun and Tron, they do look deeper than Do Kwon and the LFG meaning that their ability of maintaining the dollar peg is likely to be higher.
But, now that here is a very public playbook of how to attack the stablecoin like this one, the chance of attacks may increase more.
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Justin Sun's arrogance probably surpasses Do Kwon's as well... so USDD does seem ripe for some whales to make some easy money forcing a significant depeg.
No value there whatsoever.
Shortcuts do not equate to building, which is where resiliency comes from.
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More like a wall of sand.
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I don't feel like most of investors may want to invest in USDD after seeing a devastating UST crash.
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It's my impression that Justin is basically greedy and influence hungry like so many of these project founders are... and — as others have pointed out — he's just trying to invent another "shortcut" to something you can't really creat with shortcuts.
Sadly, I expect more than a few people will buy into the hype, but I'm also going to guess that most of them are "fast money" with absolutely no loyalty or staying power.
I'm certainly not touching that one.
=^..^=
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Other may also think twice before buying it as UST has already shaken trust of many.
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It could be. Until someone decides to build value instead of just taking short cuts, we are going to see a lot of these crash and burn.
Posted Using LeoFinance Beta
Yeah you are right.
I don't feel like most of the people would be trusting this as well.
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Scary, Although I am not invested in USDD, I hope this does not happen!!
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And I hope that people play safe.
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Agreed better to be safe than sorry!!
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I don't think Justin Sun is creative enough to make a successful stable coin and I would not be surprised if he copied some existing stable coin. Either way, if that is how his stable coins are, the network can definitely crash when the peg is broken.
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Users should proceed with caution.
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Everything even remotely related to Justin Sun is a scam.
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Lol
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