Just now, the sentencing hearing for CZ in the U.S. court has once again become the focus of the global crypto community. Each sound of the gavel causes the K-line to fluctuate violently—when the fate of a figurehead in the industry hangs by a thread, the entire market senses the bloody smell of systemic risk. In this historic moment, all investors are frantically searching for two things: a safe haven and the next certain opportunity.
And at this moment, a long-dormant keyword is being repeatedly mentioned in professional trading groups: USDD.
Why is USDD being re-examined during the turbulence of the giants?
When the rule-makers of the centralized world begin to 'net', decentralized stable mechanisms instead highlight their value in crossing cycles. USDD, as a decentralized stablecoin based on an over-collateralization algorithm, is showcasing its unique hedging logic amid this panic sentiment:
1. When the 'risk of human governance' erupts, the coldness of code becomes the greatest warmth
The CZ incident once again proves: no matter how powerful a centralized institution is, it can be instantly overturned by regulatory heavy blows.
The operation of USDD does not rely on any CEO's decisions or the compliance department of a company - its collateral ratio is transparently written on the chain, and its stability mechanism is executed by mathematical formulas.
Core Advantages: No single point of failure, no sudden freezes, no regulatory summons.
2. When the market crashes, the stablecoin sector actually welcomes the 'golden period of stress testing'
Each black swan event is a 'big exam moment' for stablecoins:
The collapse of UST tested the death spiral risk of algorithmic stablecoins
The unpegging of USDC exposed the danger of centralized custodial assets being frozen
Now, the problem facing USDD is: when the trust foundation of the entire industry shakes, can the over-collateralization model become the last Noah's Ark?
3. Data does not lie: the on-chain truth during panic moments
During the CZ hearing, the on-chain collateral ratio of USDD remained above 130% (above the 120% safety line)
The liquidation price of USDD as collateral in DeFi protocols is generally more than 30% below market price
What does this mean? Even if the market crashes by 30%, the collateral for USDD is still sufficient to cover all debts - this is a rare certainty in today's emotional market.
My direct judgment: USDD is not a tool for getting rich, it is an 'insurance policy'
If you want to rush in and trade USDD right now - stop, you completely misunderstand its essence.
The correct way to use USDD should be:
As a 'ballast' for asset allocation
When uncertainty surges, exchange some assets for USDD
Not for the rise, but to preserve purchasing power during a crash
As a 'safety cushion' for DeFi operations
Using USDD as collateral in lending protocols significantly reduces liquidation risks compared to volatile assets
In liquidity mining, USDD trading pairs usually offer more stable APR
As a 'weather vane' for observing industry health
Monitor its collateral ratio changes: consistently above 120% = system health
Observe large on-chain transfers: Is smart money accumulating during panic?
Practical Strategy: How should you handle your USDD position right now?
Situation One: You already hold USDD
Continue to hold it; it is the most stable part of your asset portfolio
Consider depositing into lending protocols that support USDD to earn stable returns (usually annualized 3-8%)
Do not exchange for other volatile assets during periods of panic - you may sell at the lowest point
Situation Two: You want to buy USDD right now
Clarify your purpose: You are looking to hedge, not to speculate
Best Timing: When the market experiences extreme panic selling (Fear and Greed Index <20)
Position Suggestion: No more than 15-25% of total assets
Situation Three: You are a trader looking for arbitrage opportunities
Monitor the price differentials of USDD across different exchanges (usually within ±0.3%)
Monitoring the collateral ratio changes: Below 120% may present arbitrage opportunities
Risk Warning: Arbitrage in stablecoins requires extremely high execution speed and capital
Final Warning: These landmines must absolutely not be stepped on!
Do not equate USDD with a savings account
It is still a cryptocurrency, with smart contract risks
Never go all in on any single stablecoin
Do not overlook the composition of collateral assets
Regularly check the proportion of TRX in USDD's collateral
Overconcentration in a single asset increases systemic risk
Do not operate during the market's most panicked times
During liquidity exhaustion, stablecoins may also temporarily unpeg
Delay decision-making until after the first wave of panic has passed
In closing: When the tide goes out, what we need is an 'immovable anchor'
Regardless of the outcome, CZ's trial has already conveyed a clear signal: the era of barbaric growth in the crypto industry has officially ended. The future winners are not the most aggressive projects, but the most robust systems.
USDD represents a direction - not pursuing a hundred times myth, but seeking stability through 100 market fluctuations. This 'boring' quality may be more valuable than any fancy narrative in the second half of the competition.
Remember: Surviving in a bear market is more important than how much you earn in a bull market. The prerequisite for survival is that there must always be a part of your asset portfolio that can maintain absolute stability in any storm.
Focus on the real value that can cross cycles rather than the illusion of getting rich overnight.
