By the end of 2025, the technical architecture of USDD has essentially evolved into a hybrid over-collateralization model, with its price anchoring no longer solely relying on algorithmic adjustments, but instead depending on the stability module PSM. This module allows market participants to conduct rigid exchanges between USDD and USDT or USDC. Through this arbitrage mechanism, when USDD generates a negative premium, market funds actively intervene to purchase and redeem reserves, using the pool's liquidity to forcibly eliminate price differences.
Regarding its claimed high collateralization rate, the focus of technical analysis should penetrate into the composition of collateral. If the reserve assets contain a high proportion of TRX, it constitutes a typical endogenous risk. Once the system encounters a trust crisis leading to a sharp decline in TRX prices, the collateral value will rapidly shrink, failing to provide substantial support. Only the coverage rate of Bitcoin and stablecoin assets after excluding TRX serves as a true indicator of its solvency under extreme conditions.
In terms of governance structure, USDD has not achieved full decentralization. Its reserve mobilization relies on the multi-signature wallet of the TRON DAO reserves, and this human decision-making mechanism is efficient in responding to sudden collapses, but it also introduces single point failure risks and censorship risks. Furthermore, for users holding USDD on Ethereum or Binance Chain, there is an additional technical risk of cross-chain bridge contracts being attacked. The current income comes from the real lending returns of reserve assets in on-chain protocols, which, while logically consistent, still requires vigilance against liquidity shortages caused by excessively high capital utilization. Investors should focus on monitoring the changes in the stock of mainstream stablecoins in the PSM pool, using it as the core basis for assessing the health of the system, rather than merely pursuing nominal high yield rates.
