An entrepreneur named Buffalu has experienced a real-life 'digital exile' over the past few years. As a co-founder of Jito Fund, he recalls: banks refused to open accounts, suppliers were afraid to cooperate, and every product launch felt like walking through a minefield. Ultimately, the team was forced to make a painful decision—to relocate its core business overseas, leaving only the code in the United States. This was a 'strategic retreat' made for survival. Now, after a long period of lobbying and waiting, the regulatory fog in Washington seems to have lifted somewhat, and they announced: we are going home. This story is about the desire and return of crypto entrepreneurs to a 'compliance homeland,' focusing on adapting to and seeking the protection of specific sovereign laws.
However, just as this story resonates within the industry, another force is constructing a completely different 'home.' This home has no geographical boundaries; its laws are open-source code, and its trust comes from mathematical validation rather than government permission. Remarkably, this 'digital city-state' has already attracted residents (capital) worth $850 million to settle here. Its name is USDD. While Jito's return path highlights the challenges of compliance, USDD's growth showcases the power of 'protocol native'—it does not seek to accommodate the old system but is committed to establishing a coherent, globally applicable new value system.
How does USDD build this 'digital city-state'? Its charter is based on three transparent pillars:
Transparent Treasury: Over-collateralization, verifiable on-chain. The city-state stipulates that for every $1 worth of 'digital passport' (USDD) issued, the treasury must lock up at least $1.3 worth of hard assets (such as BTC, TRX). This treasury is made of glass, with all reserves visible globally in real-time, addressing the fundamental trust issue.
Stable Exchange Bureau: PSM Anchoring Mechanism. The city-state has established a public exchange bureau (PSM), where anyone can exchange 1 USDD for 1 USDT and other assets at any time for free. This mechanism, through the automatic operations of global arbitrageurs, firmly anchors the market price of USDD at $1, ensuring that the value scale remains eternally stable.
Spontaneous Economic Growth Engine: Smart Allocator. This is the miracle of the city-state. Its Smart Allocator can safely invest treasury assets, continuously generating real returns. It is this income that allows the city-state to distribute benefits to 'residents'—holders can stake USDP as sUSDD to earn approximately 12% annual returns. Here, stablecoins are no longer static cash but productive assets that can self-replicate.
Therefore, we see two parallel evolutionary paths in the crypto world:
Jito Path (Seeking Compliance): The core is to embed business within existing legal and regulatory frameworks, conducting services through licensing. Its success or failure is closely tied to the policies of individual countries.
USDD Path (Building Protocols): The core is to create financial infrastructure that transcends sovereign borders through code, with trust derived from global consensus and verifiable mechanisms. Its development is driven by global market demand.
The TVL of USDD has surpassed $850 million, and its yield-generating asset sUSDD has skyrocketed by 800% in just a few days after going live on mainstream platforms. This is a vote of confidence from global capital, revealing a deep-rooted trend: while traditional finance and the crypto world are still in a long process of adaptation, a portion of capital has begun to embrace those native protocols that offer greater autonomy, certainty, and cash flow.
Looking ahead, these two models are likely to coexist and shape each other in the long term. Jito's 'compliance return' will bring clearer rules and greater traditional capital access to the industry; meanwhile, USDD's 'protocol rise' continually experiments with and defines the form of future finance at the underlying level. For every participant, this presents a fundamental choice: do you trust 'licensed institutions' backed by a country's law, or do you trust 'open-source protocols' protected by global mathematical consensus? Perhaps the most robust strategy is not to choose one over the other but to understand the expanding new digital financial landscape formed by both.
