Recently, the cryptocurrency market has been very volatile, and many stablecoins have struggled to maintain their peg, either significantly breaking away or fluctuating wildly in price, causing holders to be anxious. However, USDD in my hands is different; no matter how chaotic the market gets, it remains stable, having been pegged around 0.999 for the past six months without significant deviation. As an ordinary investor, this kind of 'stability' is truly reassuring—later I understood that this is all thanks to the PSM function of USDD, which is simply the 'ballast' of stablecoins!
First, let's talk about the 'arbitrage mechanism' of PSM, which is the core secret of USDD not breaking its peg!
Some people might not understand the technical terms, so let me explain in simple terms: PSM is like a 'price regulator' that allows USDD and USDT to be exchanged 1:1 without slippage. For example, if the price of USDD drops below 0.99, some people will buy USDD from the PSM at a 1:1 price with USDT and then sell it at a higher price in the market to make a profit; conversely, if USDD rises above 1.01, some people will exchange their USDD for USDT and then buy USDD back at a lower price in the market. After repeated operations, the price of USDD will naturally be pulled back to around 1 dollar. Moreover, exchanges have no slippage, and the transaction fees do not increase regardless of the amount exchanged, which encourages everyone to participate in arbitrage to help maintain price stability.
Let's take another look at liquidity, which is the stable 'backing'. Without enough liquidity, the arbitrage mechanism can't work!
I specifically checked, and the TRON version of PSM alone has nearly fifty million in liquidity, and liquidity on Ethereum and BSC is also very sufficient. Simply put, no matter how many people want to exchange, there is enough funding in the PSM to accommodate it, and there won't be a situation where 'you want to exchange but can't'. It's like a best-selling item in a supermarket; sufficient inventory ensures that everyone can buy it anytime, and prices won't fluctuate chaotically due to shortages. If liquidity is insufficient, if a few people exchange in large amounts, prices can easily collapse, while USDD's sufficient liquidity just fills this gap.
What impresses me the most is that compared to other stablecoins, USDD's stability stands out!
Recently, many once 'star stablecoins' have faltered, with some unpegging below 0.9 and some even directly 'exploding', causing holders to lose everything. However, after the launch of version 2.0 of USDD, regardless of whether the market rises or falls, it has consistently remained firmly pegged to the US dollar, and my selected investment plan has not been affected at all; the returns are still credited on time. This isn't just luck; it's the dual guarantee of the PSM mechanism and sufficient liquidity that allows it to 'remain steady amidst market turmoil'.
I have now converted most of my idle funds into USDD. On one hand, I trust that it won't become unpegged; on the other hand, the 1:1 exchange without slippage is convenient, and I can exchange for USDT anytime without worrying about depreciation. Occasionally, when I see news about other stablecoins becoming unpegged, I look at the stable USDD in my wallet and feel that my initial choice was absolutely right—ordinary investors like us do not pursue high risk and high returns; this kind of 'steady happiness' is the most practical.
If you are also worried about stablecoins becoming unpegged and want to find a reliable 'safe haven for funds', you can really try USDD and personally experience the smooth 1:1 exchange without slippage. See how it performs stably during market fluctuations; I believe you will feel as reassured as I do.