The most terrifying thing in the world of stablecoins is not a needle piercing the price, but a change in parameters altering expectations. USDD 2.0 emphasizes parameter politics, and the main question is: when the clearing penalty is adjusted, will the market see it as 'safer' or as 'the system is weaker'?
The clearing penalty may seem like a punishment for leveraged users, but in reality, it is a signal: a high penalty means that the system wants users to be more cautious, and it also indicates that the clearing executor has stronger profit incentives and is more willing to take over during stressful periods; a low penalty means that the system is friendlier and encourages capital efficiency, but it may also reduce the attractiveness of clearing execution. You might think this is an economic detail, but in a state of panic, the market interprets it as 'Is the system more stable or more risky?'.
The structure of USDD 2.0 is over-collateralization + liquidation chain + PSM anchoring. Penalties are the key screws in the liquidation chain: they affect whether liquidators are active, influence the behavior choices of users being liquidated, and also affect the pricing of risk in the secondary market. When penalties are too high, users will replenish their positions earlier or close their positions proactively, reducing the likelihood of waterfall liquidations; however, if penalties are excessively high, users may feel that 'the system is too harsh' and tend to withdraw early during initial volatility, thereby creating a preemptive redemption pressure. Every adjustment of parameters is a trade-off: stabilizing payouts vs. stabilizing confidence.
So what matters is: the power of decentralized stablecoins does not lie in the freeze button, but in the parameter knobs. USDD takes away the freezing rights in exchange for asset sovereignty, but the parameter knobs must be more transparent and more explainable. If penalty adjustments lack clear principles, they will be seen by the market as 'internal firefighting' or 'temporary patching', and trust costs will rise rapidly; conversely, if adjustments are logically consistent with collateral buffers, volatility environments, and PSM usage frequencies, the market will more easily regard them as 'discipline' rather than 'panic'.
The advantage of USDD is that it is on-chain verifiable: you can see whether the collateral ratio buffer is thinning, you can see whether the PSM is being frequently called, and you can see whether the liquidation density is rising. Whether parameter adjustments are cyclical, excessive, or transfer risk from the system to users can all leave traces on-chain. This is also the route that USDD 2.0 wants to take: to make the policies of stablecoins no longer a black box, but observable engineering choices.
The risk lies in - if penalty adjustments are too aggressive during periods of pressure, it will trigger users to withdraw early and amplify redemptions.
This stems from - penalties simultaneously affect liquidation incentives and user psychological expectations, and the bidirectional transmission will form feedback.
I only focus on one indicator - after the change in liquidation penalties, whether the liquidation density jumps up in the short term and continues without falling back.
The stability of USDD 2.0 is not a straight line, but the sum of a series of parameter choices. Would you prefer USDD penalties to be more 'severe' in exchange for system discipline, or more 'gentle' for user retention?