This afternoon's 5 PM alpha airdrop RTX did not disappoint everyone, with a minimum price of 32U for 25 RTX, pure profit! The 7 PM ZKP is even more worth looking forward to, expected to stabilize above 40U!
Continuously paying attention to the alpha airdrop market, while I am also thinking about where the next big opportunity for profit will come from, is it the prediction market or stablecoins?
If you are following the stablecoin sector, you must have heard of USDD. But many people may not know that USDD underwent a transformative upgrade in January this year, evolving completely from USDDOLD to USDD 2.0. This is not just a simple version iteration, but a comprehensive innovation of the business model, technical architecture, and governance mechanism. Today, I will talk about what exactly has changed in this upgrade and why USDD 2.0 is worth paying attention to.
First, let's talk about the issues with USDDOLD. The old version of USDD was essentially an algorithmic stablecoin that relied on an algorithmic mechanism to maintain price pegging. This model looked great during bull markets, but once extreme market conditions arise, algorithmic stablecoins can easily enter a death spiral. The historical collapse of UST is the most painful lesson, with hundreds of billions of dollars in market value evaporating within days, leaving countless investors with nothing. Although USDDOLD was backed by the TRON DAO Reserve, the centralized issuance and management model has always been a hidden risk, requiring users to completely trust the project team, which goes against the original intention of decentralization in blockchain.
The upgrade of USDD 2.0 completely addresses these issues. The core change is the transformation from an algorithmic stablecoin to an over-collateralized stablecoin. What does this mean? It means that behind every USDD, there are over 1 dollar's worth of crypto assets as collateral. These collateral assets include TRX, USDT, sTRX, etc., all locked in smart contracts, and anyone can query and verify them on-chain. Additionally, USDD has set strict collateral ratio requirements, with different collateral vaults needing to maintain a collateral ratio of 120% to over 300%. This means that even if the value of the collateral assets drops by 30%, the protocol still has enough collateral to support the value of USDD, preventing a collapse like that of UST.
More importantly, USDD 2.0 completely hands control back to the users. In the old model, only the TRON DAO Reserve could issue USDD, and users could only passively accept it. Now, anyone can mint USDD by collateralizing TRX or USDT and can redeem USDD for collateral assets at any time. The entire process is fully decentralized, requiring no intermediaries, and no one can freeze or modify your USDD. This design aligns with the spirit of cryptocurrency, allowing users to truly have sovereignty over their assets.
Another innovation of USDD 2.0 is the PSM (Peg Stability Module) mechanism. Simply put, PSM allows users to exchange USDD and USDT or USDC at a 1:1 ratio without slippage. When the price of USDD is below 1 dollar, arbitrageurs can exchange USDD for USDT and then sell for profit, which reduces the supply of USDD in the market and drives up the price. Conversely, when the price of USDD is above 1 dollar, arbitrageurs will exchange USDT for USDD and then sell, increasing the supply of USDD and lowering the price. This market-driven arbitrage mechanism is much more reliable than algorithmic controls, as it is based on real economic incentives rather than assumptions of some algorithm.
From the actual data, USDD 2.0 has indeed performed well. Since its launch in January this year, the price of USDD has remained stable at around 0.999 dollars, showing no significant de-pegging even during severe market fluctuations. Currently, USDD's market cap has exceeded 820 million dollars, with a circulation of over 827 million tokens, and TVL has reached between 470 million and 850 million dollars (with different statistical standards leading to discrepancies). Although this scale is still not comparable to USDT and USDC, it is already considered a leading project among decentralized stablecoins.
In terms of security, USDD 2.0 has also made significant efforts. The protocol has undergone multiple rounds of audits by CertiK and Chainsecurity, with CertiK giving it an AA rating (87.50 points), which is among the top levels in the industry. All collateral asset addresses are public, allowing users to query the protocol's collateral and liabilities at any time on blockchain explorers like TRONSCAN, Etherscan, and BscScan. This transparency is reassuring, unlike some projects that operate in secrecy and only reveal issues when problems arise.
What excites me most is the Smart Allocator mechanism introduced by USDD. This smart asset allocator invests the protocol's reserve assets into quality DeFi protocols like Aave, JustLend, and Spark, generating returns through lending and liquidity mining. A portion of these returns is used to pay interest to sUSDD holders, another portion is used to repurchase JST tokens, and some is retained as protocol reserves. Currently, the Smart Allocator has generated over 7.4 million dollars in profit, indicating that USDD no longer needs to rely on external subsidies from TRON DAO but has formed a self-sustaining positive cycle. In the long run, this economic model is much healthier than algorithmic stablecoins.
For users, USDD 2.0 offers multiple yield options. The simplest way is to stake USDD into sUSDD and automatically earn about 12% APY, with returns coming from the investment returns of the Smart Allocator. If you want higher returns, you can provide liquidity for USDD-USDT or sUSDD-USDT on PancakeSwap, with current APYs reaching over 13% to 28%. Conservative investors can deposit USDD in HTX Earn or JustLend DAO to steadily earn around 10% annualized returns. Recently, USDD also launched the Yield+ feature on Binance Wallet, and participating in the activity can lead to a total APY of over 25%, which is quite competitive in the stablecoin space.
I must say that the transition of USDD from USDDOLD to 2.0 is a very successful upgrade. It has grasped the fundamental issues of algorithmic stablecoins and built a more secure, stable, and sustainable stablecoin system through innovations like over-collateralization, decentralized minting, PSM arbitrage mechanism, and Smart Allocator. After experiencing the collapse of UST and the painful lessons of multiple stablecoins de-pegging, the market needs a stablecoin like USDD 2.0 that can withstand the test. If you are looking for a cryptocurrency asset allocation plan that can both preserve value and provide stable returns, @USDD - Decentralized USD is definitely worth your in-depth understanding. #USDD以稳见信 It is not an empty slogan, but trust earned through technology and transparency.
