#usdd以稳见信 @USDD - Decentralized USD

USDD (Decentralized USD) is a decentralized, over-collateralized stablecoin designed to maintain a 1:1 peg to the US dollar and can be used across multiple chains and in the DeFi ecosystem.

Mechanically, USDD is not entirely backed by fiat reserves but relies on various crypto assets as over-collateralization, coupled with market adjustment mechanisms to maintain price stability. This design theoretically enhances capital efficiency, but it also makes stability more dependent on market conditions.

It is important to note that:

1. In extreme market conditions, USDD has experienced brief decoupling, indicating that its stability mechanism is still affected by market fluctuations.

2. The collateral assets themselves are mostly crypto assets, and when the overall market declines, the reserve value is pressured.

3. Issuance, adjustment, and governance still carry a degree of centralization, and there is room for discussion regarding the level of decentralization.

Overall, USDD is more suitable as a tool-type stablecoin in DeFi applications rather than being fully equivalent to a low-risk digital dollar.

Before use or configuration, understanding its mechanisms and sources of risk is more important than simply focusing on the pegged price.

The above is merely an organization and observation of mechanisms and risks, and does not constitute any investment advice.